European Investment Bank Boosts Funding for Banks to Maintain Cash Flow for Small Businesses Supporting Europe's Defense Sector, Seals Initial Agreement with Our Platform
The European Investment Bank (EIB) has significantly increased the financial support available to small and medium-sized enterprises (SMEs) in Europe's defense industry, aiming to address longstanding funding barriers and foster innovation and growth at the SME level.
The EIB's Pan-EU Security & Defence Lending Envelope has seen a tripling of funding available for defense SMEs, rising from €1 billion to €3 billion. This increase is specifically targeted at supporting SMEs and mid-caps in the EU defense supply chain, which often face funding challenges that larger corporations do not encounter.
One key aspect of this initiative is the provision of loans to intermediary banks, such as the €500 million loan to Deutsche Bank. This partnership enables SMEs and mid-caps across Europe to access long-term liquidity, working capital, and investment for innovation, resilience, and growth within the defense sector.
The financing supports SMEs involved in various defense-related activities, including advanced technology development, cybersecurity, military and police infrastructure (e.g., training facilities), and dual-use technologies that may have civilian applications. This enhances both strategic autonomy and supply chain resilience of Europe’s defense industry.
Beyond loans, the EIB also provides venture debt and equity investments through facilities like the Defence Equity Facility under InvestEU, tailored to rapidly growing, innovative SMEs and start-ups. This nurtures emerging technologies and capabilities within the defense ecosystem.
The defense financing cooperation with Deutsche Bank is the first with a commercial bank under the EIB's expanded lending scheme. The move also includes Mid-Caps, another segment of the EU defense industry that has faced financing hurdles on the market.
The partnership aims to improve access to finance for security and defense projects, addressing the need for investment in innovation, supply chain resilience, and strategic autonomy amid increased geopolitical uncertainty.
The EIB has agreed to work with the national promotional institutions of France, Germany, Italy, Poland, and Spain on a pan-European approach to strengthening European security and defense. Further partnerships between the EIB and other commercial banks are due to follow shortly.
For more information, please visit AG Media Relations, contacting Frank Hartmann at [email protected] or +49 69 910 42744. The EIB can be reached at Richard Willis ([email protected], +352 621555758) or Nikos Chrysoloras ([email protected], +32 495 861060).
The boost in potential EIB lending to defense SMEs is intended to help them overcome traditional funding obstacles that larger companies in Europe typically avoid. It is worth noting that the European Union has more than 2,500 SMEs that supply key components, technologies, and services to major defense manufacturers like Airbus, Thales, Rheinmetall, and Leonardo.
The new partnership between the EIB and Deutsche Bank was unveiled at the European Defence and Security Summit in Brussels. This initiative underscores the EIB's commitment to supporting the growth and resilience of Europe's defense industry, ensuring smaller companies, which form the backbone of the defense supply chain, have the financial resources to develop cutting-edge technologies and contribute to Europe’s security.
The European Investment Bank's partnership with Deutsche Bank has enabled small and medium-sized enterprises (SMEs) and mid-caps across Europe to access necessary long-term liquidity, working capital, and investment for innovations within the defense sector, signifying a crucial aspect of the increased financial support for the industry. This financing, aimed at addressing traditional funding obstacles, supports businesses involved in defense-related activities like advanced technology development and cybersecurity, contributing to the strategic autonomy and supply chain resilience of Europe’s defense industry.
