The Cabinet of Ministers has approved a new soft loan programme for defence companies. Companies that the Ministry of Strategic Industries has recognised as critical will be able to receive loans of up to UAH 500 million for up to 5 years at 5% per annum. This was announced by Prime Minister Denys Shmyhal during a government meeting.
According to him, companies will be able to use the funds to replenish working capital or implement investment projects.
‘We expect that next year the volume of arms production will significantly exceed this year’s figures,’ he stressed.
According to him, there are already more than 500 defence companies in Ukraine producing various types of weapons, including ammunition, drones, guns and armoured vehicles.
‘We are interested in increasing the number of such manufacturers,’ the Prime Minister added.
Defence spending
Defence spending accounts for about half of Ukraine’s state budget. In January-September 2024, the total cash expenditures of the state budget reached UAH 2.3 trillion.
In particular, UAH 704 billion was allocated to pay the military.
Another UAH 195 billion was allocated to support the Armed Forces of Ukraine, other military formations and law enforcement agencies, including the purchase of military equipment, weapons, ammunition, protective equipment, fuel and lubricants, food and utilities.
Ukraine has several business support programmes in place, including the 5-7-9 programme for small and medium-sized businesses, which was launched in 2020. The programme provides concessional loans with an interest rate of 5%, 7% or 9% per annum, depending on the loan terms and business category.
