European Investment Bank Boosts Funds for Defence Firms

The European Investment Bank has tripled its funding to 3 billion euros to support the EU's defence industry. This move marks the EIB's first venture into intermediated financing for the sector. Germany's Deutsche Bank will channel the funds to small and medium-sized firms within the EU's defence supply chain.

This initiative reflects a broader strategy by the EIB to enhance Europe's security capabilities, despite a prohibition on investing directly in weapons. The plan was unveiled by the bank's President, Nadia Calviño, who emphasized the heightened priority of security and defence investments for the EIB.

The EIB plans to enter into a similar partnership with France's BPCE and other banks, underscoring a strong interest from commercial banks in participating in Europe's defence infrastructure. The initial decision to increase the funding was approved in December amid growing demand within the industry.

(With inputs from agencies.)