(Bloomberg) --

The US is sending Ukraine a new $2.1 billion weapons package, the Pentagon said Friday, including a new ground-launched, bomb-tipped rocket. Canada sent the first of four Leopard 2 tanks it pledged to donate. Ukraine’s president spoke with UK Prime Minister Rishi Sunak.  

Russia said 63 of its servicemen were returned from detention in Ukraine, including some from a “sensitive category” it didn’t specify. Ukraine said 116 of its soldiers were released in the swap, the first of 2023. 

Top Ukrainian officials were urgently dispatched to Odesa as the Black Sea port city struggles with power outages effecting some 500,000 residents following what were termed two “accidents” at a substation previously targeted by Russian missile strikes. 

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Key Developments

  • US Is Sending Ukraine Additional $2.1 Billion in Military Aid
  • As Europe Bans Russian Diesel, Traders Plot Ways Around It
  • China-Russia Ties Growing, Ministry Says After Official’s Visit
  • G-7, EU Set $100 Price Cap on Russian Diesel as Import Ban Looms
  • US Raises Pressure on Turkey and UAE to Curb Russia Trade Ties

On the Ground 

Ukraine struck Russian troop bases in occupied territory at least eight times over the past day, while Russian troops suffered “heavy casualties” in a continued offensive near Lyman, Bakhmut, Avdiivka and Novopavlivka in Donetsk, Ukraine’s military staff said on Facebook. Over the past day, Russian forces conducted 20 air and three missile strikes, including, on civilian infrastructure of Kharkiv and Mykolayiv regions. Kremlin authorities have resumed evacuation of residents from occupied areas of Ukraine, the military staff said. Two civilians were killed in Toretsk and Bakhmut over past 24 hours with 14 people injured, according to Pavlo Kyrylenko, head of the region’s military administration. 

(All times CET)

Canada Sends First Leopard Tank to Ukraine (12:20 a.m.)

Canada sent its first Leopard 2 tank to Ukraine on Saturday, one of four pledged late last month, Defense Minister Anita Anand tweeted. The donation will include spare parts, ammunition and an unspecified number of Canadian soldiers to help train Ukrainians on the equipment. 

Odesa Substation Damage Linked to Previous Russian Strikes (4:27 p.m.)

A “significant” accidental fire at an electrical substation in Odesa that’s caused widespread blackouts can be tied back to heavy damage from earlier Russian missile strikes, said Volodymyr Kudrytskyi, CEO of the grid operator Ukrenergo. 

Crucial infrastructure in the Black Sea port city is receiving electricity, including water supply and heating facilities, Kudrytskyi said. 

Some 500,000 residents in the immediate area are without electricity at the moment, the regional governor said. 

Zelenskiy, Sunak Talk as Ukrainian Crews Train on Challenger 2 (3:30 p.m.)

Volodymyr Zelenskiy spoke with UK Prime Minister Rishi Sunak about “further expanding the capability of the Ukrainian army” and about Kyiv’s demand for Russian athletes to be banned from the next Olympic Games, in Paris in 2024.  

Sunak told Zelenksiy he’s focused on ensuring UK military equipment reaches the front lines in Ukraine as quickly as possible, a readout from his office said.

The UK defense ministry earlier tweeted images it said showed Ukrainian soldiers training on the Challenger 2 main battle tanks. 

Widespread Blackouts in Odesa (3 p.m.) 

The port city of Odesa and a part of the Odesa district have been without power since Friday night after what were termed two large-scale accidents at a local electrical substation. Top officials including Ukraine’s energy minister and the CEO of the nation’s grid operator traveled to the Black Sea city to assess the damage.  

Ukrainian Prime Minister Denys Shmyhal said the scale of the accidents was “significant, with a quick restoration of electricity impossible.” 

He announced a creation of a “24/7 headquarters” to bring the situation under control. Shmyhal also ordered all fuel generators the country’s energy ministry has at its disposal to be sent to Odesa. 

Ukraine, Russia in Year’s First Prisoner Swap (11 a.m.) 

Ukraine said 116 of its service members were returned in exchange for 63 Russian prisoners of war. The Russian defense ministry said earlier that its returning soldiers included some in an unspecified “sensitive” category. 

The Ukrainians released include soldiers who captured in Mariupol in the spring and others who served in Kherson, Bakhmut and other areas, said Andriy Yermak, chief of the presidential office.  

Ukraine also received the remains of two British volunteers — Christopher Perry and Andrew Bagshaw — and of Yevhen Kulyk, a Ukrainian who served in the French Foreign Legion before returning after Russia’s invasion. 

‘Sensitive’ Russian Servicemen Among New Prisoner Swap (10 a.m.)

A prisoner swap involving 63 Russian servicemen included an unnamed number from a “sensitive category” released after mediation efforts involving the United Arab Emirates, Russia’s defense ministry said. 

“A complicated negotiations process resulted in 63 Russian servicemen returned from Ukrainian territory,” the ministry said. 

The UAE was also involved in the swap of US basketball player Brittney Griner for Russian arms dealer Viktor Bout in December. 

Poland Now Training Ukrainian Troops on Leopard 2 Tanks (11 a.m.) 

Poland is already training select Ukrainian soldiers on German-made Leopard 2 main battle tanks, defense minister Mariusz Blaszczak said in Kyiv on Friday. The first round of training is expected to be completed within weeks, as Ukraine and its allies brace for a potential new attack by Russian. 

Countries that have issued firm declarations have also started the procedure of handing over the tanks, Blaszczak said during a joint appearance with Oleksii Reznikov, Ukraine’s defense chief. 

The joint efforts of allies to create a Ukrainian tank battalion is “gathering pace,” he said, adding that final declarations from states willing to donate the Leopards are expected at the next meeting of the Ramstein group in Brussels in mid-February.

US Aid Volunteer Killed Near Bakhmut (8 a.m.)

American volunteer aid worker Pete Reed was killed in Bakhmut in eastern Ukraine on Thursday according to a statement from Global Response Medicine, the humanitarian group he founded. 

Reed, 33, a US Marine veteran, was “killed while rendering aid” for another group, Global Outreach Doctors, GRM said in a statement posted on social media first reported by CNN. 

“This is a stark reminder of the perils rescue and aid workers face in conflict zones as they serve citizens caught in the crossfire,” GRM said. 

Latest US Weapons Package Includes New Hybrid Rocket/Bomb (7 p.m.)

The US is sending Ukraine a new $2.1 billion weapons package, the Pentagon said, including a new ground-launched, bomb-tipped rocket.

The latest aid includes $425 million in equipment drawn from existing US stockpiles and $1.75 billion in contracts to the defense industry, Brigadier General Pat Ryder, a Defense Department spokesman, told reporters at the Pentagon.

The new rocket from Boeing Co. combines two proven devices: an Air Force Small-Diameter Bomb guided by GPS satellites that’s currently in wide use and an Army rocket already being operated by Ukraine’s forces. An industry official said it would take about nine months for the first deliveries once the Air Force issues a contract.

EU Backs $100 Price Cap for Russian Diesel as Import Ban Looms (6:20 p.m.)

European Union member states agreed to impose a cap of $100 per barrel on sales of Russian diesel to third countries as part of an effort to limit Moscow’s revenues, according to people familiar with matter. 

The price cap mechanism is tied to an EU ban on seaborne imports of Russian refined fuels that kicks in Sunday. The bloc agreed to the $100 level for petroleum products that trade at a premium, including diesel. It backed a cap of $45 for those that sell at a discount, such as fuel oil and some types of naphtha.  

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