The first £752 million tranche of the UK's Extraordinary Revenue Acceleration (ERA) loan to Ukraine has been transferred in demonstration of the UK's commitment to Ukrainian defence.
UK has sent first third of its £2.26 billion loan to Ukraine for the country to spend on military equipment in its hour of need
Chancellor Rachel Reeves visited RAF Northolt to meet with UK suppliers sending equipment to Ukraine
Delivery of the UK's contribution to the G7 $50 billion Extraordinary Revenue Acceleration loan is the latest step in support for Ukraine from the UK government, with national security key to the Plan for Change
The ERA funding is on top of the £3 billion a year commitment by the UK to provide military aid for Ukraine. The Prime Minister has been clear that a strong Ukraine is vital to UK national security.
The money transferred yesterday Thursday 6 March, is part of a £2.26 billion loan backed by the profits of immobilised Russian sovereign assets, and will help Ukraine buy military equipment to defend itself against Russia's unprovoked aggression.
It follows the Prime Minister's commitment to increase defence spending to 2.5% of GDP from 2027, with an ambition to reach 3% in the next parliament as economic and fiscal conditions allow, and announcing an additional £1.6 billion of UK Export Finance to Ukraine. National security is fundamental to the government's Plan for Change, and will help improve the lives of people across the UK by growing the economy.
To mark this signal of UK support, Chancellor of the Exchequer Rachel Reeves, visited RAF Northolt to meet Armed Forces personnel. She also met suppliers sending vital equipment to the Armed Forces of Ukraine through UK MoD rapid procurement contracts.
Companies at RAF Northolt yesterday included Malloy, MBDA and Thales, as well as UK-based SMEs including Greenjets, Kirintec and Windracers - displaying a range of defence equipment such as air defence missiles, bomb disposal suits and cargo drones.
Increased defence spending will support highly skilled jobs and apprenticeships across the UK. Last year, defence spending supported over 430,000 UK jobs the equivalent to one in every 60, with 68% of defence spending going outside of London and the Southeast, benefitting every nation and region of the country.
Rachel Reeves, Chancellor of the Exchequer, said:
"Now more than ever in this changed world, Ukraine needs our support as a reliable partner to secure peace following Russia's unprovoked invasion.
"British excellence and innovation in defence was on display as I visited RAF Northolt yesterday. Our contribution to the war effort via increased defence spending is also supporting UK industries and jobs and putting money back in the pockets of hardworking British people."
The multibillion-pound funding is the UK's contribution to the G7 ERA Loans to Ukraine Scheme, through which G7 countries will collectively provide $50 billion to support Ukraine. The UK's contribution is earmarked for military procurement to bolster Ukraine's defences, and is being delivered in three £752 million payments. A tranched approach will allow for greater flexibility in military procurement, and will provide the best value for money for both the UK and Ukraine.
Chancellor Reeves and Ukraine's Finance Minister Sergii Marchenko signed the UK-Ukraine bilateral loan agreement on Saturday in the presence of Prime Minister Keir Starmer and Ukraine's President Volodymyr Zelenskyy in No.11 Downing Street.
Last week, the Chancellor alongside the Business Secretary and the Defence Secretary confirmed that a new UK defence innovation organisation will work with innovative firms to rapidly get cutting-edge military technology into the hands of British troops, and harness the ingenuity of the UK's leading tech and manufacturing sectors.
The Prime Minister and President Zelenskyy also signed a historic 100 Year Partnership in Kyiv earlier this year. The landmark treaty formalised the unbreakable bonds between the UK and Ukraine, broadening and deepening the relationship across defence and non-military areas and enabling closer community links.
