Ukraine launches low-interest loan program to boost arms production
The Ukrainian government has introduced a preferential loan program to help domestic arms manufacturers increase production and speed up deliveries to the military.
Ukrainian Minister of Strategic Industries Herman Smetanin said that on 5 November, the Ukrainian government launched a preferential loan program for Ukrainian arms and military equipment manufacturers, Militarnyi reports.
Ukraine’s defense development has become increasingly vital amid the war with Russia as the nation strives to enhance its military capabilities and reduce reliance on foreign assistance.
The Ukrainian government is prioritizing the establishment of a robust defense industrial base, aiming to produce over 50% of its military equipment domestically by 2024.
Under the program, the government anticipates that domestic enterprises will be able to produce more weapons and deliver them to the military more quickly.
According to Smetanin, the interest rate for manufacturers will be 5%, with the state budget covering the remaining interest.
The loan amount will be up to $2 million for working capital for up to 3 years and up to $11 million for investment projects for up to 5 years.
These funds can be used for the development, production, repair, modernization, and disposal of weapons, military and special equipment, ammunition, their components, and other military-purpose products required to meet the needs of the Ukrainian Defense Forces.
The program will be available to enterprises that the Ministry of Strategic Industries has already identified as critical for the functioning of the economy during a particular period in the defense sector.
The program was developed in response to the need for affordable loans for Ukrainian defense industry enterprises, especially private ones, to produce arms and military equipment. Currently, loan interest rates are high, making them inaccessible for many companies.
As a result, companies need more access to working capital for advanced developments and scaling up production.
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