The Polish government will reallocate the money from an EU recovery programme. 

Poland has secured EU approval to divert a PLN26 billion (GBP5.1 billion) fund into defence investment, an announcement from the Polish government revealed on the 23 May.

In a post on X, Poland’s Secretary of State for the Ministry of Development Funds and Regional Policy (MFiPR), Jan Szyszko, said negotiations with the European Commission had been completed and that Poland now has consent to create a new ‘Security and Defence Fund’.

The fund will support the country’s defence readiness goals and will be managed by a committee co-chaired by funding and defence ministers, a spokesperson for Poland’s Ministry of National Defence (MND) told DSEI.

“At the current stage, we are working on the development of the concept, ensuring a comprehensive and well-structured framework. Simultaneously, we are engaged in formal consultations and coordination with the European Commission to align our efforts with relevant guidelines and expectations,” the spokesperson added.

While the fund is not intended for direct procurement of military weapons, it will be used to support infrastructure and for systems that enhance security and resilience, a spokesperson for the MFiPR told DSEI.

Specifically, these areas include civil-defence infrastructure, dual-use technologies, secure communications, early-warning systems and logistics support platforms that can serve both civilian and military needs, the MFiPR spokesperson said.

“Once the calls for proposals are opened, the Polish Development Bank – acting as the fund’s implementing institution – will assess all submissions and select those projects that meet the fund’s investment strategy and eligibility criteria for support,” the spokesperson added.  

Around 80% of the fund will be used as loans available to local governments and enterprises, while 20% will be allocated as equity investments available to established enterprises and SMEs, as well as startups, the MFiPR spokesperson continued.

Spending under the defence fund is expected to begin in the second half of 2026, the MFiPR spokesperson confirmed.

European approval was necessary as this new fund is being diverted out of Poland’s ‘Green Urban Transformation Facility’, a sustainability project developed under the country’s National Recovery Plan (NRP), which is supported by the EU.

Seeking to secure the diversion earlier this year, Poland’s Minister of Funds and Regional Policy, Katarzyna Pełczyńska-Nałęcz, stated that the sustainability project had been implemented at a lower cost, thus freeing up funds – PLN26 billion – for defence.

This will not affect the sustainability project, Pełczyńska-Nałęcz added, which has around PLN40 billion available in loans for local authorities.

“This is one of those moments in history for the European Union when we need to invest more and better in our defence and competitiveness and in the development of Polish and European industry,” Szyszko said ahead of EU approval.

This article has been updated with new information from Poland’s MFiPR.