Hungary has withdrawn its opposition to a €90 billion ($106 billion) European Union loan to Ukraine, a move that will likely allow the bloc to provide crucial financial support to Kyiv as the conflict with Russia continues. The decision was announced on Wednesday during a meeting of EU ambassadors in Brussels, which also saw agreement on a new package of sanctions against Russia that had similarly been stalled.

Prime Minister Viktor Orban’s government had blocked the loan since February, citing delays in repairing the Druzhba oil pipeline that supplies Russia’s oil through Ukraine to Hungary and Slovakia. The pipeline was damaged in an incident Ukraine described as a Russian attack, and Budapest had accused Kyiv of not acting swiftly enough to fix it. Orban’s opposition followed a period in which Hungary had previously consented to the loan in December but changed position ahead of its April 12 parliamentary elections amid a campaign critical of Ukraine and skeptical of the EU.

Following Orban’s electoral defeat, the winning candidate Peter Magyar indicated he would lift the veto once assuming office next month, though progress ultimately accelerated before Magyar’s formal transition. On Sunday, Orban acknowledged on social media that the pipeline’s repair was imminent and pledged to cease blocking the loan once oil deliveries resumed. Ukraine’s President Volodymyr Zelensky confirmed the pipeline had been restored on Tuesday, and Hungarian energy firm MOL announced oil flow had recommenced on Wednesday.

The resumption of oil transit through the Druzhba pipeline removed a key barrier to finalizing the loan and sanctions measures, which are expected to receive swift approval. The funding will offer Ukraine significant financial support beyond interim aid arrangements, enabling Kyiv to purchase essential military equipment and maintain its defenses amid Russia’s ongoing full-scale invasion, now entering its fifth year.

The loan will be provided under favorable terms, including zero interest, and would only require repayment if Russia pays reparations to Ukraine. Hungary, along with the Czech Republic and Slovakia, secured opt-outs from financial liability for the loan, which is backed by the EU’s common budget.

European officials emphasize the urgency of releasing the funds, with Lithuanian Foreign Minister Kestutis Budrys noting the importance of a rapid first disbursement expected as soon as next month. Zelensky stressed the need for prompt activation of the support package to sustain his country’s war efforts.

While Magyar has adopted a somewhat more conciliatory stance toward the EU compared to Orban, his approach to Ukraine remains cautious. He has yet to endorse additional financial aid and has expressed reservations about accelerating Ukraine’s EU integration.

The final approval of the loan is anticipated by Thursday, coinciding with a meeting of EU leaders in Cyprus where Ukraine’s situation, Middle Eastern affairs, and other topics will be discussed.