Finance ministers give go ahead to boost security and defence industry

EU finance ministers meeting in Luxembourg have welcomed the action plan from European Investment Bank President Calviño to update the definition of dual-use projects and extend EIB credit lines to SMEs and innovative startups in security and defence. The EIB will adapt its policy for lending to the security and defence industry while safeguarding its financing capacity. A task force and a ‘one-stop shop’ will streamline EIB Group processes and speed up investments, with €6 billion earmarked for projects in this sector. The EIB Group will also strengthen cooperation with the European Defence Agency and other partners to increase impact, synergies, and complementarity.

The European Investment Bank Group (EIB Group) will update its policies and framework for lending to the security and defence industry. This includes an update of the definition of dual-use goods and infrastructure, as well as support to small and medium-sized enterprises (SMEs) and startups, and a commitment to accelerate the deployment of funds to strengthen Europe’s security and defence capabilities.

Boosting EIB Group support to safeguard Europe´s peace and security is one of the top strategic priorities outlined by President Calviño and endorsed by EU Finance Ministers, at their February meeting and by the European Parliament. It was then agreed that concrete proposals would be discussed in April.

The EIB Group Security and Defence Industry Action Plan was unveiled by EIB President Nadia Calviño at the meeting of EU Finance Ministers (ECOFIN) in Luxembourg. The Action Plan follows on from two months of intensive engagement with the Bank’s shareholders, key stakeholders and markets, and acts upon the European Council’s recent mandate to further improve access to finance for European defence firms, while safeguarding the EIB Group’s financing capacity.

“We will step up and accelerate our support for Europe’s security and defence industry while safeguarding our financing capacity and highest Environmental, Social and Governance standards. As the financial arm of the EU, we must contribute to ensuring Europe´s peace and security. The Action Plan set in motion today will improve financing conditions for European projects. We will work together with Member States and EU institutions, to speed up projects that secure the well-being of our citizens”, President Calviño said.

Going forward, the Bank will waive the requirement that dual-use projects derive more than 50% of their expected revenues from civilian use. This will align the EIB Group to public financial institutions that equally limit their financing to equipment and infrastructure that serve defensive military or police and also civilian needs, such as reconnaissance, surveillance, spectrum protection and control, decontamination, research and development, equipment, military mobility, border control and protection of other critical infrastructure, and drones.

Moreover, the EIB Group will update its rules for SMEs financing in the sector of security and defence. This will open dedicated credit lines for a great number of smaller companies and innovative startups, which require funding for dual use projects.

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The EIB Group also plans to immediately strengthen partnerships and collaboration with key stakeholders, including through signing and updating memoranda of understanding with the European Defence Agency and other partners.

Crucially, the Bank also plans to streamline and improve its internal processes, creating a dedicated Task Force, and a one-stop shop for security and defence projects which will be operational by 1 May 2024. This will speed up investments and access to EIB Group funding for clients in Europe’s security and defence sector to deploy the €6 billion in financing available under the Strategic European Security Initiative (SESI), and thus further boost the EIB’s already considerable support to the European security and defence industry under the existing framework. The proposals are subject to EIB Group internal approval processes.

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