Cash-strapped Ukraine secured a European Union wartime loan on Thursday, when EU leaders formally approved a €90 billion ($106 billion) package after a weekslong linkage to restored oil transit through the Druzhba pipeline. The approval followed President Volodymyr Zelenskyy’s announcement that repairs to the Ukrainian section of the pipeline had been completed, clearing conditions tied to releasing the money.
The funding arrives as Ukraine faces a major near-term financing gap, the International Monetary Fund estimates at about €136 billion ($158 billion) over the next two years. EU officials said the loan was needed at a critical moment to sustain both basic state functions and Ukraine’s war effort, with officials warning that without the support Kyiv could have run out of resources as early as this spring.
The EU loan is structured so that it is meant to cover a significant share of Ukraine’s spending needs. EU officials said it is expected to cover about two-thirds of Ukraine’s funding requirements in 2026 and 2027, with the first tranche expected to be released in coming months.
Under the agreement, Ukraine will have access to €45 billion for the remainder of this year and another €45 billion for all of 2027. A roughly one-third share is directed to budgetary support for the Ukrainian government, while the remainder is intended for defense, including weapons procurement and expanding domestic arms production.
The timetable for approval also reflected internal political and energy-related disputes inside the bloc. EU leaders agreed to the loan in December 2025, but implementation stalled for months amid disagreement tied to the Ukraine-linked section of the Druzhba oil pipeline, which carries Russian oil to Slovakia and Hungary.
The standoff broadened inside the EU as the pipeline went offline in late January, after Ukrainian officials said it was damaged in a Russian attack. Hungary and Slovakia then accused Ukraine of deliberately cutting off supplies, turning a technical energy dispute into a broader political conflict among EU members as negotiations dragged on.
Approval for the loan was ultimately unblocked after Hungary and Slovakia said that Ukraine had restored transit on the pipeline during the week, and Zelenskyy said repairs had been completed. The final step on Thursday was for EU leaders to unanimously approve changes to the bloc’s long-term budget to enable future spending, a step described as one that required bringing Hungary and Slovakia onboard.
EU leaders also set terms for how Ukraine will repay the loan, aligning repayment timing with Russia’s reparations. The deal provides that Ukraine will begin repaying only once Russia pays war reparations.
The agreement also reflects how the EU chose to structure the financing and risk protections. Rather than guaranteeing the loan with Russia’s frozen central bank assets, member states agreed to borrow the funds themselves to lend to Ukraine, with leaders citing concerns over potential Russian retaliation and legal challenges that helped keep the assets frozen until Moscow ends its war and compensates Ukraine for the destruction caused.
As the EU’s wartime financing package moves from approval to implementation, the linkage to the Druzhba pipeline shows how energy infrastructure and internal EU politics continue to shape the pace at which aid can be released—an issue that has remained intertwined with earlier efforts to address the pipeline’s operation and transit.