EU Approves €90 Billion Loan to Ukraine Following Druzhba Pipeline Reopening and Hungary's Veto Removal

EU ambassadors approved a €90 billion loan to Ukraine on Wednesday after Hungary lifted its veto on the funding. The decision followed Ukraine's resumption of Russian oil flows through the Druzhba pipeline to Hungary and Slovakia. Ambassadors also approved a fresh package of Russian sanctions, marking the 20th such package.

Hungary dropped its opposition to the loan after Ukraine reopened the Druzhba pipeline, ending months of stalemate over stalled oil supplies to Hungary. Ukrainian oil and government sources told officials in Hungary and Slovakia that pumping had restarted.

A Ukrainian government source was quoted as saying that the transit of oil had begun at 12:35 local time (09:35 GMT). Supplies are expected to reach Slovakia on Thursday and Hungary by Thursday at the latest.

The €90 billion loan funding was agreed in December, but Hungary's Viktor Orbán imposed a veto on the payment in February. Orbán, who is acting as caretaker leader until early next month, made clear at the weekend that as soon as oil deliveries through the pipeline were restored "we will no longer stand in the way of approving the loan".

Ukraine said damage from a Russian attack halted Druzhba pipeline supplies at the end of January, with satellite images showing substantial damage to a major oil tank at Brody in western Ukraine in late January. Meanwhile, Ukraine has also targeted oil facilities inside Russia, including a pumping station in Samara region linked to the Druzhba pipeline.

EU ambassadors gave preliminary approval to the €90 billion loan, with EU leaders set to sign it off at an informal summit on Thursday. Two-thirds of the €90 billion loan will be spent on Ukraine's defence needs, while one-third will go on broader financial assistance. The Cypriot presidency confirmed the preliminary approval of the loan.

Slovak Economy Minister Denisa Sakova was told by Ukrtransnafta that pressurising of the Druzhba pipeline began on Wednesday morning. Hungarian energy firm Mol expects the first Druzhba pipeline supplies by Thursday at the latest. EU member states gave preliminary approval to unlock the €90 billion loan for Ukraine on Wednesday, after Hungary vetoed the funding due to the oil dispute over the Druzhba pipeline.