Ukraine’s Defense Sector Secures $1.5 Billion in International Funding for Arms Production

The Ukrainian defense sector received over $1.5 billion in funding from international partners in 2024 to bolster its arms production, according to Minister of Strategic Industries Herman Smetanin on January 27.

This funding, part of the ‘ZBROYARI: Manufacturing Freedom’ initiative, aims to strengthen Ukraine’s ability to support its defense forces through domestic production.

Nine countries—Denmark, Canada, the Netherlands, Lithuania, the United Kingdom, Sweden, Norway, Iceland, and the United States—along with the European Union, contributed to this initiative. Funding came from national budgets and proceeds from frozen Russian assets.

Under the initiative, over $500 million has already been utilized through the “Danish model” of contracting. This approach facilitated the production of the 2S22 Bohdana self-propelled howitzers, as well as long-range drones, anti-tank missiles, and anti-ship missiles.

Denmark was the first country to participate, committing $170 million for 18 Bohdana howitzers. Canada joined shortly thereafter, providing $95 million to procure 800 SkyRanger R70 drones. Ukrainian officials proposed an alternative to these drones—locally produced models at a lower cost—which led Canada to allocate an additional $2.1 million for test batches of Ukrainian drones.

The Netherlands has also made significant contributions, allocating €17.5 million for Ukrainian maritime drones and €20 million for FPV drones, with part of this funding directed to domestic producers.

Securing support from Germany and the United Kingdom presented challenges due to competition with established defense manufacturers. However, Ukraine addressed this by forming a joint venture between Ukroboronprom and Germany’s Rheinmetall to produce Lynx infantry fighting vehicles locally. While funding for procurement has not yet been secured, the production will be financed by Rheinmetall.

In the UK, discussions focused on the repair of L119 howitzers using Ukrainian facilities, supported by British defense company BAE Systems.

Launched at the end of 2023, the ZBROYARI initiative aims to attract $10 billion in defense contracts by the end of 2025.

Minister Smetanin emphasized the importance of this support, stating, “These funds not only strengthen Ukraine’s defense forces but also enhance the country’s economy, allowing us to build the Arsenal of the Free World.”