EIB triples financing for banks to provide liquidity to SMEs in the supply chain of Europe’s defence industry, signs first deal with Deutsche Bank - EIB increases intermediated loans and guarantees available for key defence-industry segment to €3 billion from €1 billion.
- Move to support small and medium-sized businesses that serve major European defence manufacturers in partnership with commercial banks across EU.
- First agreement with Deutsche Bank to enable €1 billion financing for defence research, as well as military and police infrastructure.
The European Investment Bank (EIB) is tripling to €3 billion the intermediated financing available to Europe’s defence-industry suppliers in a fresh move to bolster security on the continent. The EIB is also triggering the new facility through an inaugural agreement with Deutsche Bank, providing long-term liquidity earmarked for security and defence investment projects. The EIB’s increase in intermediated financing targets small and medium-sized enterprises (SMEs) that are a pillar of Europe’s defence industrial base. The EIB is providing a €500 million loan to Deutsche Bank, in a partnership that will enable €1 billion in financing and working capital for SMEs throughout the European Union security and defence supply chain, as well as military and police infrastructure such as training facilities for military personnel. The new partnership was unveiled at the
European Defence and Security Summit in Brussels today by EIB Group President Nadia Calviño. It will support improved access to finance for security and defence projects, addressing the urgent need for investment in innovation, supply chain resilience, and strategic autonomy amid increased geopolitical uncertainty. “Strengthening Europe’s security and defence is central to our mission,” said President Nadia Calviño. “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.” “With this framework loan, Deutsche Bank will be able to deploy capital to clients at all stages of the supply chain throughout Europe, where it is most needed,” said Fabrizio Campelli, Deutsche Bank’s Head of Corporate Bank and Investment Bank and Member of the Management Board of Deutsche Bank AG. “It will support the comprehensive efforts our bank is deploying to advise and finance the sector at this crucial moment for Europe. Deutsche Bank is honoured to be the first European bank to partner with the EIB under its Pan-EU Security & Defence Lending scheme. The message is clear: we stand ready to reinforce the resilience of Europe’s security and defence.” The threefold increase in the EIB’s
€1 billion “Pan-European Security and Defence Lending Envelope” approved in December 2024 reflects exceptionally strong interest by commercial banks across Europe in leveraging the EIB’s resources, freeing up liquidity to support investments in the sector. The defence financing cooperation with Deutsche Bank is the first with a commercial bank under the EIB’s expanded lending scheme, with further partnerships currently due to follow shortly. It follows the
agreement announced last week between the EIB and the national promotional institutions of France, Germany, Italy, Poland and Spain on a pan-European approach to strengthening European security and defence. Ther EIB and the five long term investors – Caisse des Depôts, Kreditanstalt für Wiederaufbau (KfW), Cassa Depositi e Prestiti (CDP), Bank Gospodarstwa Krajowego (BGK) and Instituto de Crédito Oficial (ICO) – agreed to work together on areas of investment and on potential joint financing in sectors such as research and development, industrial capacity, and infrastructure. The EU has more than 2,500 SMEs that are essential suppliers for major defence manufacturers such as Airbus, Thales, Rheinmetall and Leonardo. The SMEs provide key components, technologies and services, underpinning jobs, innovation and growth in the sector. The boost in potential EIB lending to defence SMEs is meant to help them counter traditional funding obstacles that larger companies in Europe are generally spared. The move also covers Mid-Caps, another segment of the EU defence industry that has faced financing hurdles on the market.
