The initial $1 billion installment of a $20 billion loan from the United States, secured by frozen Russian assets, has been disbursed to Kiev, as announced by Ukrainian Prime Minister Denis Shmigal on Tuesday. In response, Russia has pledged to take action against what it terms the “theft.”

This payment follows the US Treasury Department’s recent contribution of $20 billion to a World Bank fund designated for Ukraine. The European Union has committed an additional $20 billion to this fund, while G7 nations, including Britain, Japan, and Canada, will contribute another $10 billion, bringing the total to $50 billion, which is expected to be repaid over a span of 40 years.

The loan is financed through the interest accrued from immobilized Russian sovereign assets. Approximately $300 billion belonging to the Russian central bank was frozen by the US and its allies after the escalation of the conflict in Ukraine in February 2022.

Shmigal expressed in a post on X that he anticipates all sovereign Russian assets will be seized and utilized for the reconstruction of Ukraine.

In a separate statement on Tuesday, Shmigal noted that Ukraine has also received $1 billion from Japan and the UK through the same World Bank initiative.

Since 2022, Ukraine’s government, military, and public services have relied heavily on foreign assistance, as the ongoing conflict with Russia has severely strained the nation’s finances. Last month, President Vladimir Zelensky enacted the budget for the upcoming year, projecting revenues of $49 billion against expenditures of $87 billion, resulting in a deficit of $37 billion.

The International Monetary Fund (IMF) has cautioned that the appropriation of Russian assets could erode global trust in the US and its allies. Meanwhile, the Kremlin has consistently condemned the asset freeze as “theft,” asserting that accessing these funds would be illegal and could set a perilous precedent.

Kremlin spokesperson Dmitry Peskov has indicated that Moscow intends to pursue legal action against those involved in the asset seizure.