EDA and EIB mark a year of work on financing EU projects in defence

Homeland March 6, 2026

European defence spending hit new high in 2019

The European Investment Bank (EIB) and the European Defence Agency (EDA) have marked the one-year milestone of their landmark cooperation agreement, signaling a significant shift in the availability of institutional finance for the European defence sector.

Following the signing of an updated Memorandum of Understanding in October 2024, the partnership has facilitated a substantial increase in capital flow toward security and defence projects. In 2025 alone, the EIB Group invested more than €4 billion into the sector, with the EDA providing critical technical and policy assessments for specific projects valued at approximately €700 million. This surge in funding highlights a broader institutional push to bolster supply chain resilience and industrial competitiveness.

The primary focus of these investments lies in infrastructure, research and development (R&D), and the enhancement of strategic autonomy. For businesses operating within the defence supply chain, including those with cross-border interests or European subsidiaries, these developments offer a more predictable framework for securing project finance. The EDA’s involvement ensures that investments are strictly aligned with agreed defence priorities, reducing the risk of industrial fragmentation. This alignment is intended to ensure that resources are directed toward projects with the highest added value, such as innovative capability development and the moderniastion of manufacturing facilities required for high-intensity operations.

To expedite the deployment of capital, the EIB has established a dedicated Security and Defence Office. This administrative body is tasked with accelerating the assessment of proposals, addressing a historical bottleneck in defence procurement and financing. Furthermore, the EIB has expanded its eligibility criteria to accommodate a wider range of security-related initiatives, a move that particularly benefits small and medium-sized enterprises (SMEs). Through joint workshops and technical exchanges, the EIB and EDA have worked to clarify these eligibility requirements, providing greater certainty for firms seeking institutional backing for complex, high-stakes projects.

As the cooperation enters its second year, both organisations have committed to refining the practical methods through which industrial support is delivered. The successful evaluation of projects worth €700 million in 2025 demonstrates a tangible commitment to bridging investment gaps and fostering a self-reliant defence industrial base. For the wider supply chain, this institutional shift underscores the importance of aligning R&D and infrastructure projects with long-term strategic objectives. As the geopolitical landscape continues to evolve, the integration of financial mechanisms with defence policy will remain a cornerstone of industrial growth and stability, providing a more robust environment for contractors and sub-contractors alike.

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