Rescue workers at a residential building hit by shelling in Dnipro, Ukraine, 14 January 2023. Photo: EPA-EFE/STR
The Kremlin may allow $300 billion (€287 billion) of its sovereign assets frozen in Europe to go towards the reconstruction of post-war Ukraine, Reuters reported on Friday.
While sources told Reuters discussions between the US and Russia were still at a very early stage, one suggested Russia may allocate two thirds of the frozen assets to the restoration of territory under Kyiv’s control as part of any peace deal to bring the war to an end, with the remaining third to go on reconstruction in the regions it has occupied.
A second source suggested the Kremlin was willing to use the frozen assets to contribute towards the reconstruction of Ukraine, but said it was too early to say how the funds would be allocated.
Two sources told Reuters there would be important discussions regarding which companies would be awarded contracts to rebuild Ukraine, while Russia would continue to demand its assets be unfrozen as part of the gradual easing of sanctions, according to one source close to the Kremlin.
CNN reported in mid-January that the outgoing Biden administration had proposed transferring Russia’s frozen assets to a special account which Russia would only be able to access after signing a peace agreement with Ukraine, a proposal supported by US President Donald Trump’s team.
In June, the G7, which consists of Canada, France, Germany, Italy, Japan, the UK and US, agreed to use Russia’s frozen assets to finance a new $50 billion (€46 billion) loan to Ukraine.
Ukraine now finds itself under increasing pressure from the Trump administration to sign a deal that would see Kyiv repaying Washington for its assistance since the war began almost three years ago by granting it indefinite access to its mineral, oil and gas wealth.
Washington would have preferential access to resources for export and almost complete control over most of the raw material sector of the Ukrainian economy, while providing Kyiv no security guarantees in return.