EU to provide €343 million in guarantees and grants for Ukraine's defence sector
The European Commission, Ukraine's Ministry of Defence, and the governments of France and Finland have agreed to provide €343 million in EU guarantees and blended finance grants to support Ukraine's defence industry.
Ukraine's Ministry of Defence announced that the European Commission, together with the ministry and the governments of France and Finland, has agreed to allocate €343 million in EU guarantees and blended finance grants to bolster the development of Ukraine's defence sector. The funds will be directed toward expanding industrial capacity for defence production and dual-use technologies.
The agreements were signed in Gdańsk during the Ukraine Recovery Conference. These new instruments are expected to mobilise over €700 million in investments for the production of unmanned aerial vehicles and counter-drone systems, ground robotic systems, military aviation, advanced navigation and communications technologies, and other strategic sectors.
The financing will be provided under the second component of the Ukraine Facility, which includes the Investment Framework for Ukraine aimed at attracting public and private investment. The budget for this component stands at €9.5 billion, comprising €7.8 billion in guarantees and €1.7 billion in blended finance grants.
Hanna Hvozdiar, an adviser to Ukraine's defence minister, emphasised that investments should cover not individual products but the holistic technological framework of modern defence.
The agreements also included a memorandum between Ukrainian UAV manufacturer SkyFall and Polish state bank Bank Gospodarstwa Krajowego to finance investments expanding SkyFall's production capacity. The ministry noted that financing under the second component of the Ukraine Facility will help SkyFall meet growing demand and support its integration into the European industrial and technological base.
During the Recovery Conference, Ukrainian companies signed several deals with European arms manufacturers. Roboneers will set up a joint venture with Germany's ARX Robotics. Ukrainian radio developer Himera signed a cooperation agreement with Finland's Bittium. TAF Industries and Polish defence group PGZ signed a memorandum of intent on industrial cooperation in drones and counter-drone systems. Ivchenko-Progress, Polish defence company PZL Defence, and its parent group Unimot S.A. signed a memorandum on developing small turbojet engines. Additionally, DevDroid signed a memorandum of understanding with Norway's Kongsberg Defence & Aerospace.
