Defense companies will be provided with preferential loans
5 November 15:16
Ukraine has launched a preferential lending program for defense industry manufacturers developed by the Ministry of Strategic Industries of Ukraine. This is stated in a statement by the Ministry of Strategic Industries, Komersant ukrainskyi reports.
The Cabinet of Ministers of Ukraine has already supported the relevant resolution, which launches the process of implementing a program of preferential lending for defense companies.
“Affordable lending will allow manufacturers, first of all, to produce more weapons and deliver them to the frontline faster. It will also allow them to operate more confidently and scale up production. In fact, this is our key goal as the Ministry of Strategic Industries,” said Herman Smetanin, Minister of Strategic Industries of Ukraine.
Features of the loan program
on September 18, the Verkhovna Rada of Ukraine supported the allocation of UAH 263.4 million to the Ministry of Strategic Industries to finance this program, which is the amount until the end of 2024.
This is a new budget program “Reimbursement of interest on loans granted to defense industry enterprises involved in the implementation of state targeted programs related to the development of the defense industry.”
The program is open to enterprises, institutions, and organizations that are determined by the Ministry of Strategic Industry to be critical for the functioning of the economy during a special period in the defense industry.
The interest rate for manufacturers will be 5%. The loan amount is up to UAH 100 million for working capital for up to 3 years, and up to UAH 500 million for investment projects for up to 5 years.
The need to develop such a program
The reason for developing the program was the need for defense companies, especially private ones, to have affordable loans for the production of weapons and military equipment. As of now, loans have a high interest rate, which is unaffordable for enterprises.
Consequently, defense companies do not have adequate access to working capital to carry out future developments and expand existing operations, and the process of purchasing equipment for weapons production, purchasing individual machines, components, etc. is quite lengthy.
What the funds can be used for
The funds received under the program can be used for the development, manufacture, repair, modernization and utilization of weapons, military and special equipment, ammunition, their components and other military products used to meet the needs of the Defense Forces.
Who will provide soft loans
The program is administered by the Entrepreneurship Development Fund. Only those banks that have a top-secret facility will provide preferential loans. As of now, these are Oschadbank and Ukreximbank. FUIB is in the process of being established. The list of banks will be supplemented.
