The government is simultaneously preparing two new financial support mechanisms for Ukrainian arms manufacturers.
Ukraine’s military-industrial complex currently consists of 500 defense companies, 80% of which are private. Before the full-scale war began, private companies occupied 20% of the market.
In 2023, Ukrainian gunsmiths increased production by 200% to $3B. However, manufacturers lack working capital due to a scarcity of available funds, making it difficult to invest in development.
To address this, the government has introduced the following two programs:
- For manufacturers already operating in the market, a mechanism for the state to guarantee loans for private manufacturers based on the current program of portfolio guarantees.
- For startups, the provision of loan interest rate compensation that is based on the current Affordable Loans 5–7–9% program.
The Ministry of Strategic Industries expects the resolution to be adopted by the end of the month. If such mechanisms are introduced for military industrial enterprises, the state-owned Oschadbank can start financing defense industry companies on new terms within four to seven weeks, providing tens of billions of hryvnias in financing for this market segment.