Ukrainian drone manufacturers allowed to include interest on loans in cost price

Ukrainian manufacturers of drones and electronic warfare systems will now be able to include interest on loans in the cost price of their products. The government approved the relevant measure this week following a request from the Ministry of Defence, Denys Shmyhal announced.

The updated financial mechanism is intended to enable Ukrainian enterprises to develop weapons and technologies more rapidly and efficiently. At the same time, a cap has been introduced: loan costs must not exceed 10% of the total cost.

The full text of the government decision has not yet been published. It is likely that the capitalisation of interest will apply to production facilities that have been operational for more than three months and have secured targeted loans.

In November 2024, the government adopted a resolution to reimburse 95% of interest payments on loans for defence industry enterprises, allowing manufacturers to access financing at an effective rate of 5% per annum. The maximum loan amounts are set at up to UAH 100 million for working capital (for up to three years) and up to UAH 500 million for investment projects (for up to five years).

Since the beginning of 2025, 29 preferential loans have been issued to defence industry enterprises in Ukraine, totalling UAH 1.57 billion. As of now, four banks are providing these subsidised loans to Ukrainian defence manufacturers: Ukreximbank, Oschadbank, MTB Bank, and PUMB.

In June, Deputy Minister of Strategic Industries, Hanna Hvozdiar (now Deputy Minister of Defence), explained that the department is working to implement a special economic regime for enterprises within the defence‑industrial complex. To support arms manufacturers financially, they proposed preferential loans, grants and a leasing programme.

Last week, Defender Media also reported that manufacturers of interceptor drones and the relevant ministries are in negotiations with state banks about financing drone production under state guarantees.