Interest-free single payment loan: Details of financial aid from US become known
The Cabinet of Ministers of Ukraine (Government of Ukraine) has agreed on the text of an agreement between Ukraine and the United States on attracting financial assistance to the Ukrainian budget as part of a support package worth more than US$60 billion.
The relevant decision was made during a government meeting on 30 May.
The agreement's text has become available to Ekonomichna Pravda.
According to the text of the agreement, US economic aid will exceed US$9.4 billion and will be allocated under several programmes:
- Up to US$7.849 billion will be allocated from Economic Support Funds (ESF), which will be sent to the state budget of Ukraine;
- Up to US$50 million will be allocated to prevent and respond to food insecurity (the list of countries receiving these funds will be determined later).
This US$7.899 billion was provided for in the US Supplemental Security Appropriations Act for Ukraine for 2024 (USSAA), which US President Joe Biden signed on 24 April 2024.
In addition, the United States will allocate up to US$1.575 billion to Ukraine from aid funds for Europe, Eurasia and Central Asia (AEECA).
Under the agreement, US funds will be provided on an interest-free loan, which will not be adjusted for inflation. The Ukrainian authorities undertake to repay the loan within the agreed time frame.
Repayment of the loan balance will be made in a single dollar payment 40 years after 30 September 2025 (i.e. 30 September, 2065).
At the same time, the agreement allows the US President to write off part of the loan. So, after 15 November 2024, the US president can write off up to 50% of the loan amount granted. After 1 January 2026, the president of the United States can cancel any remaining repayment amount. Any loan cancellation made by the US will be irrevocable and irreversible.
Background:
On 23 April, the Senate finally approved the legislative package providing almost US$61 billion in additional military and economic assistance to Ukraine, as well as aid to other US allies.
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