The Norwegian government will allocate NOK 2 billion ($190.48 million) to increase the potential of the country’s defense industry.

The Government stated that the Norwegian defense industry company Nammo would receive NOK 1 billion of these funds.

Oslo will transfer the rest of the money to other projects in the country’s defense sector.

Norwegian Defense Minister Björn Arild Gram reported that Oslo will increase Nammo’s production capacity to meet the needs of Norway, its allies, and Ukraine.

“Improving the capabilities of the defense industry is important for both Ukraine and our own security,” the Minister said.

At the moment, European defense companies are attempting to increase production, but this is hampered by weak production capacity, labor shortages, and disruptions in the raw material supply.

Nammo is one of the largest ammunition manufacturers in Europe, which should support Ukraine with artillery shells.

“NOK 1 billion will go to Nammo to increase the artillery ammunition production,” the Norwegian Government added.

Last year, the Government awarded several major contracts, including the largest contract in the company’s history, to ammunition manufacturer Nammo.

Norway is also involved in the Northern European munitions project.

Recently, the Swedish Defence Materiel Administration (FMV) also signed an agreement with Nammo.

The deal covers the investment in increasing the capacity to produce 155mm artillery ammunition in Sweden.