UK secures access for defence firms to £78 billion EU Ukraine Support Loan

Homeland July 16, 2026

In partnership with Ukraine Defence Industries (UDI), Ukraine’s state-owned defence holding company, Babcock will ensure that critical military assets are available when and where they are needed most

Prime Minister Keir Starmer has announced a landmark agreement giving UK defence companies access to procurement contracts funded through the EU’s £78 billion (€90 billion) Ukraine Support Loan, opening a significant new route to market for British industry while reinforcing UK support for Ukraine.

The deal was announced as Starmer arrived in Paris for a meeting of the Coalition of the Willing, following the successful conclusion of UK-EU negotiations first announced at the European Political Community Summit in Armenia in May. It marks a significant step forward in UK-EU defence and security cooperation, with UK companies now eligible to bid for contracts funded by the loan, unlocking billions in potential investment and supporting skilled jobs across the UK defence industrial base. The UK’s contribution to the initiative will be proportionate to the value of contracts secured by British industry.

Of the €90 billion loan, €60 billion is specifically allocated to Ukraine’s defence capabilities over 2026 and 2027, complementing rather than replacing the UK’s own military support. This year alone the UK has committed £3.75 billion in military support to Ukraine, with a standing commitment of £3 billion annually “for as long as it takes.” Since Russia’s full-scale invasion, total UK support for Ukraine has reached £25 billion, comprising £16 billion in military assistance and £5.6 billion in non-military support.

Starmer said the agreement would help ensure “Ukraine gets the support it needs to defend itself against Russian aggression, while backing British defence companies, supporting skilled jobs and strengthening our national security.” The announcement came alongside the first joint UK-EU cyber sanctions package targeting Russian state actors and criminal networks, and a joint UK-EU attribution of last year’s attempted attack on Poland’s energy infrastructure to Russia’s FSB Centre 16, an attack that could have left up to 500,000 people without power had it succeeded. The UK-EU agreement is subject to a Council Implementing Decision and is expected to be confirmed by the summer.

For the UK defence supply chain, this agreement opens a substantial new procurement channel funded outside the UK’s own defence budget, giving British firms, particularly those with capability relevant to Ukraine’s ongoing defence needs, a clear route to bid into a multi-billion euro programme running through 2027.

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