The move marks the latest in a string of initiatives aimed at smaller firms.

The EU’s European Investment Bank (EIB) has tripled the financing available to defence firms from EUR1 billion to EUR3 billion, an 11 June announcement from the organisation has revealed.

Targeting small and medium-sized enterprises (SMEs) specifically, the EUR3 billion will be available via national banks that divide up the fund through intermediated financing.

The first bank to share in the fund will be Deutsche Bank which will receive a EUR500 million loan from the EIB in a “partnership that will enable EUR1 billion in financing and working capital” for SMEs, the EIB states. Partnerships with other banks are due to follow.

Unveiled at the European Defence and Security Summit in Brussels, the EIB said this move will improve access to financing for defence projects and address the need for investment in innovation, supply chain resilience, and strategic autonomy.

Additionally, it will help defence SMEs and mid-cap firms counter the funding obstacles that larger firms are typically spared.

The move also signals “exceptionally” strong interest from European commercial banks in leveraging the EIB’s resources to support the defence industry, the EIB added.

“Strengthening Europe’s security and defence is central to our mission”, EIB Group President Nadia Calviño said.

 “We’re scaling up financing to record levels, and through intermediated lending and partnerships with banks across the EU, we ensure that SMEs in the defence supply chain have access to the financing they need”, Calviño added.  

This announcement follows an agreement on 6 June between the EIB and key financial institutions in France, Germany, Italy, Poland, and Spain that centres on driving investment in the sector.  

Under this partnership, six long-term investors in these countries will work together on areas of defence investment in a “pan-European approach to strengthening European security and defence”.

DSEI Gateway News is part of DSEI UK and the broader Clarion Defence portfolio. 
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