(KYIV, UKRAINE) – Ukraine’s defence industry has secured more than 10 billion hryvnias or $271.7 million (USD) in subsidised loans through a state support programme, providing manufacturers with funds to expand production and modernise military equipment. The total of 167 loans represents a significant injection of capital into a sector that Kyiv views as central to the country’s long term security.
The loans were issued under a scheme administered by the Ministry of Defence. Of the total number granted, 12 have already been fully repaid, according to ministry data. The programme offers Ukrainian arms producers access to additional financial resources for development and scaling up manufacturing.
Enterprises in the defence industrial complex can borrow up to 500 million hryvnias for investment projects, with a repayment period of up to five years. For working capital needs, firms can access up to 100 million hryvnias over a maximum of three years. At current exchange rates, the investment ceiling of 500 million hryvnias equates to approximately 13.6 million US dollars or 10.7 million British pounds. The working capital limit of 100 million hryvnias is around 2.7 million dollars or 2.1 million pounds.
Funds from the programme can be directed towards the development, manufacture, repair, modernisation and disposal of weapons, military and special equipment, ammunition and their components. The annual interest rate for defence enterprises is set at 5 percent, with the state compensating the remaining cost of financing, the Ministry of Defence said.
Hanna Hvozdiar, adviser to the defence minister, said such measures help Ukrainian producers grow, invest in their own capabilities and plan development with confidence. A strong, technologically advanced and resilient defence industrial complex is one of the foundations of Ukraine’s future security, she added.
The ministry said the state is steadily establishing subsidised lending as one of the basic mechanisms to support the development of the defence industry. The policy forms part of a wider package that includes preferential financial leasing and a special legal framework known as Defence City, among other initiatives.
The Ministry of Defence continues to develop financial mechanisms that help enterprises scale up production, increase the supply of Ukrainian made armaments and strengthen the country’s defence resilience.
The latest lending figures follow a report that Ukrainian forces ordered drones, ground robots and electronic warfare and signals intelligence systems worth a record 5 billion hryvnias in June through the Brave1 Market defence procurement platform. At current rates, that order value stands at roughly 136 million dollars or 107 million pounds.