Calls by Norwegian politicians to push Oslo to use its €1.8 trillion sovereign wealth fund to help unblock the EU’s €140bn Ukraine loan proposal are growing, according to Euractiv and Politiken.

This considers a proposal in which Norway would secure financing as collateral and a way to overcome Belgian objections to using frozen Russian sovereign assets to back the EU loan facility for Kyiv. Reportedly, five political parties in Norway, including three that support Prime Minister Jonas Gahr Støre’s Labour-led government, have supported the scheme. 

As followed in detail by bne IntelliNews, Belgium is key in any deal involving sanctioned Russian assets as the EU state hosts the Euroclear clearing house holding most of the immobilised funds.

Belgium previously skimmed the “windfall profits” from investing these funds, but refused to proceed with any other action unless other member states share the legal and financial risks.

The idea of using AAA Norway sovereign wealth fund to step gained traction following a 23 October EU leaders’ summit in Brussels, after Danish newspaper Politiken revived the proposal by interviewing two Norwegian economists. 

When asked by Politiken, Danish Prime Minister Mette Frederiksen called the idea “great” but noted that she was unaware of any serious Norwegian interest. Ukrainian President Volodymyr Zelenskyy, when approached by the same journalist, said his meeting with Støre had mostly focused on gas.

“We are paying close attention and are continuing our dialogue with EU colleagues,” state secretary Ellen Reitan told Euractiv. Støre also reportedly ordered a full review of Norway’s potential involvement last week.

The EU’s €140bn plan aims to provide long-term financial support to Ukraine, whose funding gap is estimated by the IMF at €55bn over the next two years. 

The EU and G7 have reached an agreement to use the proceeds from the frozen assets to issue $50bn worth of bonds to support Ukraine. The deal would be backed by the profits earned from the investments of $280bn of frozen Central Bank of Russia (CBR) assets.

In the meantime, while the US and the UK continue to push to seize the frozen funds altogether, this has been largely opposed by the EU, and reportely, by Saudi Arabia behind the scenes.

Another support mechanism for Ukraine based on frozen Russian assets is already working. Earlier in July Belgium-based Euroclear depository said it would transfer €1.55bn from the windfall income from blocked Russian frozen assets to the Ukraine Facility fund, the first payment under the newly adopted EU regulation on contributions to the fund.