EU Allocates €1.1B for Arms for Ukraine, and €1B for Ukrainian Defense Industry

The European Commission will allocate €2.1 billion in revenue from frozen Russian assets to military assistance for Ukraine.

Of this amount, €1.1 billion will be used to purchase weapons for Ukraine, while €1 billion will be directed to Ukraine’s domestic defense industry under the so-called Danish model.

EU Ambassador to Ukraine Katarina Maternova announced this in an interview with the Interfax-Ukraine news agency.

“This week, the European Commission will receive €2.1 billion in windfall revenues from frozen assets of the Russian central bank held in central securities depositories. Most of the funds will go toward purchasing weapons, ammunition, and air defense systems for Ukraine, in the form of grants,” Maternova shared.

Part of the funds will be allocated to EU member states to purchase ammunition and air defense systems. The remaining €1 billion will be used to purchase defense products directly from Ukrainian manufacturers.

Stages of installation and assembly of an armored cabin on the chassis of a Bohdana self-propelled howitzer. Photo credits: MilitarnyiMaternova noted that this is not the EU’s first investment in Ukraine’s defense sector. In August 2024, the EU had already invested €400 million in the Ukrainian defense industry.

“This time, the EU will provide €1 billion in grants to the sector. Contracts are currently being prepared,” she added.

The European Commission first proposed allocating €1 billion from the proceeds of frozen Russian assets to Ukraine’s defense industry in November 2024.

These funds will be part of a second tranche aimed at strengthening Ukraine’s defense capabilities. Initially expected to match the first tranche of €1.5 billion, the second tranche was increased by €600 million, according to the ambassador.

The first tranche—€1.5 billion in windfall proceeds from frozen Russian assets—was allocated in July 2024. 90% of that amount was channeled through the European Peace Facility to deliver priority equipment to Ukraine.

The funding covered artillery ammunition and air defense systems, with €400 million directed toward direct orders from the Ukrainian defense industry.

This assistance is separate from the loan mechanism involving G7 and EU countries using frozen Russian assets. The EU’s support program was formalized on May 21, 2024, when the Council of the European Union approved the use of such proceeds to support Ukraine’s defense and reconstruction.

Approximately 90% of the funds will continue to be allocated via the European Peace Facility for military aid, including weapons deliveries. The remaining 10% will support other Ukraine-related initiatives.