Norway Weighs Using Trillion-Euro Sovereign Fund as Collateral for Ukraine Loan

Norway Considers Major Financial Guarantee for Ukraine

Norway is currently evaluating a proposal to utilize a portion of its colossal sovereign wealth fund, the Government Pension Fund Global, as collateral for a European military loan exceeding 100 billion euros destined for Ukraine. This potential intervention seeks to unblock a critical European aid package that has faced significant hurdles.

The initiative comes as the European Union struggles to finalize a plan to lend approximately 140 billion euros to Kyiv, primarily by leveraging frozen Russian state assets. However, this approach has encountered resistance, notably from Belgium, where the financial institution Euroclear manages a substantial portion of these immobilized funds. Concerns over legal and financial risks associated with using these assets have stalled the process.

The Role of Norway's Sovereign Wealth Fund

Norway's sovereign wealth fund, the world's largest, is valued at approximately €1.7 trillion. The idea of using a portion of this fund as a guarantee has gained traction within Norway. Two prominent Norwegian economists, Havard Halland and Knut Anton Mork, have publicly advocated for the country to offer its fund as surety for Ukraine's financing. They argue that Norway, having seen its oil and gas revenues surge due to the conflict, should contribute more significantly to the collective European effort.

The proposal suggests that Norway would not be directly lending money to Ukraine but would instead act as a guarantor, thereby reducing the risk for lenders and facilitating the release of the European loan.

Political Support and Government Response

The concept has garnered considerable political support within Norway. Reports indicate that four out of the nine political parties represented in the Norwegian parliament have voiced their backing for the initiative. Norwegian Prime Minister Jonas Gahr Støre has acknowledged the proposal, confirming his government's readiness to consider the option. He has reportedly ordered a detailed analysis to assess the legal and economic sustainability of such a move.

This discussion takes place amidst broader calls for Norway to increase its contributions to Ukraine. Some European partners, including Denmark, have suggested that Norway has benefited economically from the war due to increased energy prices, leading to pressure for greater financial involvement.

Existing Norwegian Aid to Ukraine

Norway has already committed substantial aid to Ukraine through the Nansen Support Programme for Ukraine. This program, endorsed by all political parties in the Storting, initially pledged NOK 75 billion (approximately €6.7 billion) over a five-year period from 2023 to 2027. The program has since been expanded and extended, with a minimum allocation of NOK 155 billion (approximately €13.5 billion) committed for the period 2023-2030. For 2025 alone, Norway has allocated NOK 85 billion (approximately €7.4 billion) in support, with a significant portion dedicated to military aid, including air defense systems, artillery ammunition, and drones.