Financing the Defense Industrial Base
Under a state-backed support program, companies within Ukraine’s defense-industrial complex (DIC) have signed 162 credit agreements, securing 9.8 billion hryvnias in concessional loans. This initiative enables defense firms to access financing for up to five years, with individual loans reaching as high as 500 million hryvnias. For working capital needs, businesses can borrow up to 100 million hryvnias over a three-year period.
2026 Budget Allocations
Security and defense spending in 2026 is projected at 4.4 trillion hryvnias. An additional 1.37 trillion hryvnias has been earmarked specifically for weapons procurement and repairs, bringing the total resources allocated to armaments to 2.29 trillion hryvnias. In May 2024, the Verkhovna Rada passed a law granting the DIC access to the 5-7-9% program. Through this framework, weapons manufacturers can obtain loans at 7% interest for investment purposes and 9% for working capital financing. The maximum loan amount for these producers is capped at 500 million hryvnias.
'This is an investment in Ukraine’s ability to independently meet the needs of its military. The faster our arms manufacturers scale up production, the more modern weaponry and military equipment the Defense Forces will receive,' stated Yuliia Svyrydenko.
She also highlighted the tool’s effectiveness: 'We see that this instrument is working efficiently. Its results are seen and felt by our enemy.'
In December 2025, the government outlined the main spending priorities for the 2026 state budget, committing 100% of its own revenues to the Defense Forces. These funds will be allocated to:
- development
- production
- repair
- modernization
- disposal of weapons, military and special equipment, ammunition, and their components
Mobilizing substantial financial resources for Ukraine’s defense industry represents a critical step in strengthening national security and defense capabilities. The concessional lending program allows DIC enterprises to ramp up production and adopt new technologies, which in turn should enhance Ukraine’s ability to counter external threats. The government’s significant defense expenditures underscore the prioritization of security amid the country’s ongoing challenges.
In light of these financial advancements, it is crucial to note that 23 Ukrainian banks have recently committed to support the financing of the defense sector. This collaboration is expected to further bolster the capabilities of defense firms, enhancing their ability to meet the demands of the military and ensuring a robust defense industrial base for Ukraine.