The Ukrainian defense industry has the potential to produce weapons worth up to $40 billion annually; however, a significant portion of this capacity remains unused due to limited funding. This was emphasized by Yegor Chernev, Deputy Chairman of the Verkhovna Rada Committee on National Security, highlighting that the financial gap between production capabilities and actual contracts hinders the country’s defense capabilities.
This is reported by Business • Media
Diverse Models of Support and Funding
To overcome the financial shortfall, various approaches to international support are being implemented. The first effective scheme was the so-called “Danish model,” which allowed partners to directly purchase Ukrainian weapons for the Armed Forces of Ukraine. Subsequently, the “Dutch model” emerged: within its framework, the Netherlands independently selected priority Ukrainian manufacturers and directly funded their activities.
Need for Funding and Plans for 2026
Yegor Chernev clarified that the strategic goal is to fund about half of the production potential of the defense sector from the state budget, while the remaining funds are expected to be attracted from foreign partners.
“If last year the amount of attracted funding was about $6 billion, the target for this year is to cover approximately 50% of the financial gap (around $17 billion) for contracting domestic production,” he specified.
Among the key partners willing to invest in production, Chernev mentioned Germany, Norway, the Netherlands, and other Northern European countries. In particular, the Netherlands will allocate about €2 billion in 2026 to support the Ukrainian defense industry. Additionally, cooperation is being developed to involve foreign companies in localizing production within Ukraine, as well as placing Ukrainian enterprises abroad.