Ukraine Negotiates Second ERA Loan, Weighs Russian Collateral for 2027 Budget

Ukraine is negotiating a second Extraordinary Revenue Acceleration (ERA) loan while pushing to use Russia’s frozen sovereign assets more broadly as collateral, as Kyiv scrambles to close a financing gap in its record 2027 budget.The Cabinet of Ministers submitted a $162.1 billion budget for 2027 to parliament this week, including $52 billion in external financing needs for next year. Of that, $32.6 billion remains unresolved with international partners, with no confirmed sources yet identified to cover the gap as Kyiv works with allies on ways to fund its defense and budget needs against Russia’s ongoing invasion.JOIN US ON TELEGRAMFollow our coverage of the war on the @Kyivpost_official.Both Finance Minister Serhiy Marchenko and central bank governor Andriy Pyshnyy said Kyiv is pursuing two tracks: using immobilized Russian assets as collateral for aid to Ukraine, and developing a second ERA loan for the same purpose.Signed in late 2024, the first ERA loan directed interest earnings from Russia’s immobilized assets toward Ukraine to compensate for war-related destruction, providing $50 billion in financial assistance that Ukraine does not have to repay.Presenting the budget to lawmakers, Marchenko named frozen Russian assets as the government’s central hope for closing the gap. “The most fundamental and promising source is the management of frozen Russian assets, and, … structuring the so-called parliament on Sept. 16.Pyshnyy confirmed the effort to Kyiv Post at a monetary briefing on Thursday, adding that it is being discussed “at the highest level.” Other Topics of Interest Ukraine Submits Record 2027 Budget as Finance Minister Warns of Cash Strain Finance Minister Serhiy Marchenko presented Ukraine's record 2027 budget to parliament, warning of a year-end cash crunch and a $32.6 billion financing gap for 2027. “The so-called ERA loan 2 is indeed a project the Ukrainian team is currently working on together with our European partners … The fact that certain countries pushed using the immobilized assets, joined – including, if memory doesn’t fail me, by an appeal from 190 members of the European Parliament – shows that political will is now being built to discuss this issue,” he said, responding to a question from Kyiv Post. Sweden pushed the European Commission to revive the debate on Russia’s frozen assets, FT reported. The Commission has since resumed searching for a legally sound way to unlock the assets, after an earlier attempt was blocked by Belgium. In November 2025, Belgian Prime Minister Bart De Wever said Belgium’s support for using Russian assets would depend on EU countries sharing potential legal liabilities, providing “full and signed guarantees” and addressing risks to the euro, according to a letter to European Commission President Ursula von der Leyen.However, Pyshnyy did not disclose any details about the negotiations. “I’ll say I’m optimistic that returning this issue … which would allow structuring an appropriate arrangement like an ERA loan. Talking about details now is probably premature. I think there need to be appropriate consultations between the European Union and Belgium, which has its own request for covering the relevant risks,” he told Kyiv Post. ERA Loan-1 was negotiated at the end of 2024 between Ukraine, the EU, the US, Canada, Japan, and the UK. The US has contributed $20 billion to the ERA, the EU’s contribution amounted to €35 billion ($37.84 billion), the UK committed $3 billion, Canada disbursed nearly $1.7 billion to Ukraine, and Japan should contribute $3.08 billion.As for the remaining Russian assets, beyond those left in Belgium’s Euroclear, others are held in other jurisdictions, Kyiv Post previously wrote. “The total amount of sovereign Russian assets may reach up to €210 billion ($243.6 billion) in the EU countries. Revenues from €180 billion ($208.8 billion) of Russian assets held in Euroclear backed provision to Ukraine of €45 billion ($50 billion) under the Extraordinary Revenue Acceleration (ERA) loan. Then €90 billion ($102 billion) was provided under the Ukraine Support Loan, implicitly guaranteed by frozen assets in the EU. But we can discuss using a larger amount as ‘collateral’,” a person familiar with the matter told Kyiv Post.“Theoretically, it’s possible to work with the Belgians – to meet the demands that other European countries and the European Commission were unwilling to meet last year,” the person added. Olena Hrazhdan is the Business Reporter at Kyiv Post, covering Ukraine’s markets, business, and economic policy. While she reports broadly on economic issues, her core focus is banking, finance, monetary and fiscal policy. Olena previously wrote for leading Ukrainian business media and became a Fellow of the International Monetary Fund’s Journalism Fellowship in 2024.