EU for first time allows Ukraine Facility funds to go toward dual-use technologies, – Defence Ministry
For the first time, the European Union has allowed funds under the Ukraine Facility programme to be directed towards the development of Ukrainian dual-use technologies.
Previously, such areas could not be financed with money from this programme, Deputy Defence Minister Hanna Hvozdiar said during her speech at the Rebuild Ukraine Expo in Warsaw.
According to her, this decision will allow manufacturers of advanced navigation and communication systems, next-generation drones, aerospace technologies and precision metallurgy to receive funding.
"The extension of the Ukraine Facility to dual-use technologies is the result of several months of joint work by Ukraine and the EU. It opens access to financial resources, primarily in the amount of more than EUR 140 million, which the EU will channel from the Ukraine Investment Framework into loans and grants for companies," the deputy minister said.
She added that practical aspects of implementing this instrument, potential funding volumes and further steps are currently being discussed.
The deputy minister also spoke about the scale and dynamics of the development of Ukraine’s dual-use sector.
Ukraine is building a modern, competitive and innovative defence and dual-use industry. Last year alone, more than 3,000 companies produced dual-use products worth EUR 5.5 billion and this is only part of the potential we are demonstrating to our partners today," Hvozdiar noted.
Why Ukraine is not receiving funds under the Ukraine Facility programme
As reported earlier, in early November the EU Council approved the allocation to Ukraine of the fifth support tranche under the EU’s Ukraine Facility instrument. Its size will be EUR 1.35 billion, and the EU will pay almost another EUR 600 million along with it for the adoption of the ARMA reform, which Ukraine was supposed to implement earlier.
At the same time, Ukraine will receive less than the full amount of the fifth tranche, which takes into account the fulfilment of commitments in the second quarter and should have totalled almost EUR 2 billion.
The size of this tranche was reduced due to the failure to complete two reforms: the verification of judges’ integrity declarations and the reform to digitalise enforcement proceedings. Ukraine has until the end of the second quarter of 2026 to implement them.
It should be recalled that earlier the EU similarly reduced the size of the fourth financial assistance tranche to Ukraine in 2025 under the Ukraine Facility mechanism, because Ukraine had failed to complete 3 out of 16 reforms it had pledged to the European Union.
The European Commission explained that if all indicators had been met and all 16 reforms implemented, Ukraine would have received EUR 4.5 billion. But since 3 of the 16 indicators remained unfulfilled, the size of the tranche will be reduced to EUR 3.05 billion. The European Commission clarified that of the three reforms not implemented, "one relates to decentralisation, another to the law on the ARMA reform, and the third to the selection of judges to the High Anti-Corruption Court."
