EIB triples financing for banks to provide liquidity to SMEs in the supply chain of Europe’s defence industry, signs first deal with Deutsche Bank

This article is published in association with European Investment Bank.

• EIB increases intermediated loans and guarantees available for key defence-industry segment to €3 billion from €1 billion.
• Move to support small and medium-sized businesses that serve major European defence manufacturers in partnership with commercial banks across EU.
• First agreement with Deutsche Bank to enable €1 billion financing for defence research, as well as military and police infrastructure.

The European Investment Bank (EIB) is tripling to €3 billion the intermediated financing available to Europe’s defence-industry suppliers in a fresh move to bolster security on the continent. The EIB is also triggering the new facility through an inaugural agreement with Deutsche Bank, providing long-term liquidity earmarked for security and defence investment projects.

The EIB’s increase in intermediated financing targets small and medium-sized enterprises (SMEs) that are a pillar of Europe’s defence industrial base. The EIB is providing a €500 million loan to Deutsche Bank, in a partnership that will enable €1 billion in financing and working capital for SMEs throughout the European Union security and defence supply chain, as well as military and police infrastructure such as training facilities for military personnel.

The new partnership was unveiled at the European Defence and Security Summit in Brussels today by EIB Group President Nadia Calviño. It will support improved access to finance for security and defence projects, addressing the urgent need for investment in innovation, supply chain resilience, and strategic autonomy amid increased geopolitical uncertainty. 

“Strengthening Europe’s security and defence is central to our mission,” said President Nadia Calviño. “We’re scaling up financing to record levels, and through intermediated lending and partnerships with banks across the EU, we ensure that SMEs in the defence supply chain have access to the financing they need.”

“With this framework loan, Deutsche Bank will be able to deploy capital to clients at all stages of the supply chain throughout Europe, where it is most needed,” said Fabrizio Campelli, Deutsche Bank’s Head of Corporate Bank and Investment Bank and Member of the Management Board of Deutsche Bank AG. “It will support the comprehensive efforts our bank is deploying to advise and finance the sector at this crucial moment for Europe. Deutsche Bank is honoured to be the first European bank to partner with the EIB under its Pan-EU Security & Defence Lending scheme. The message is clear: we stand ready to reinforce the resilience of Europe’s security and defence.”

The threefold increase in the EIB’s  €1 billion “Pan-European Security and Defence Lending Envelope” approved in December 2024 reflects exceptionally strong interest by commercial banks across Europe in leveraging the EIB’s resources, freeing up liquidity to support investments in the sector. The defence financing cooperation with Deutsche Bank is the first with a commercial bank under the EIB’s expanded lending scheme, with further partnerships currently due to follow shortly.

It follows the agreement announced last week between the EIB and the national promotional institutions of France, Germany, Italy, Poland and Spain on a pan-European approach to strengthening European security and defence. Ther EIB and the five long term investors – Caisse des Depôts, Kreditanstalt für Wiederaufbau (KfW), Cassa Depositi e Prestiti (CDP), Bank Gospodarstwa Krajowego (BGK) and Instituto de Crédito Oficial (ICO) – agreed to work together on areas of investment and on potential joint financing in sectors such as research and development, industrial capacity, and infrastructure.

The EU has more than 2,500 SMEs that are essential suppliers for major defence manufacturers such as Airbus, Thales, Rheinmetall and Leonardo. The SMEs provide key components, technologies and services, underpinning jobs, innovation and growth in the sector.

The boost in potential EIB lending to defence SMEs is meant to help them counter traditional funding obstacles that larger companies in Europe are generally spared. The move also covers Mid-Caps, another segment of the EU defence industry that has faced financing hurdles on the market.  

Background information

About the EIB   

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. The EIB finances investments in eight core priorities that support EU policy objectives: climate action and the environment, digitalisation and technological innovation, security and defence, cohesion, agriculture and the bioeconomy, social infrastructure, the capital markets union and a stronger Europe in a more peaceful and prosperous world.  

The EIB Group, which also includes the European Investment Fund (EIF), signed nearly €89 billion in new financing for over 900 high-impact projects in 2024, boosting Europe’s competitiveness and security.    The EIB Group stepped up its support to Europe’s security and defence industry in 2024 by enlarging the scope of projects eligible for financing and setting up a one-stop shop to streamline processes, doubling investment to €1 billion. The EIB Group expects to multiply this amount in 2025 to new record.

The Board of Directors in March approved a series of additional measures to further contribute to European peace and included peace and security as a cross-cutting Public Policy Goal to finance large-scale strategic projects in areas such as land-border protection, military mobility, critical infrastructure, military transport, space, cybersecurity, anti-jamming technologies, radar systems, military equipment and facilities, drones, bio-hazard and seabed infrastructure protection, critical raw materials and research. 

In addition to financing, the EIB offers advisory services that help public and private partners develop and implement high-quality, investment-ready projects. In 2024 alone, EIB advisory teams helped mobilise over €200 billion of investment across Europe and beyond.

High-quality, up-to-date photos of the organisation’s headquarters for media use are available here. 

About Deutsche Bank

Deutsche Bank provides retail and private banking, corporate and transaction banking, lending, asset and wealth management products and services as well as focused investment banking to private individuals, small and medium-sized companies, corporations, governments and institutional investors. Deutsche Bank is the leading bank in Germany with strong European roots and a global network.