Defence companies secure 7.5B UAH in concessional financing. These loans are now also available through Ukrgasbank

Ukrainian banks have already disbursed 125 concessional loans totalling 7.5 billion UAH to defence industry enterprises under a state financing initiative, according to Аnna Gvozdiar, adviser to the Minister of Defence. Ukrgasbank has recently joined the list of authorised lenders, further expanding manufacturers’ access to credit and leasing instruments.

Concessional financing is available to companies designated as critical to the economy during a special period. The scheme covers the entire lifecycle of military hardware—from research and development (R&D) and production to the maintenance, modernisation, and disposal of weaponry.

The programme offers financing at an effective rate of approximately 5% per annum. The state compensates the remaining interest costs. Enterprises can access up to 100 million UAH for working capital. For investment projects, they can raise up to 500 million UAH. This includes equipment procurement and the commissioning of new production lines. The maximum financing term is five years.

The leasing procedure stipulates a multi-stage process. First, a company applies to a participating bank or lessor. The lender then evaluates creditworthiness and the underlying asset. Following the Ministry of Defence’s confirmation of the company’s status, a formal agreement is signed. The bank then procures, registers, and insures the asset before transferring it to the lessee. The enterprise pays a down payment of at least 20%, followed by monthly instalments. Full ownership is transferred upon completion of all payments.

The framework also allows for a grace period on principal repayments of up to 12 months. Additional terms include a one-off arrangement fee of up to 0.75%, while any penalty charges are capped at the base rate plus 5 percentage points. Non-compensated administrative fees are limited to 1% for real estate, 4% for freight, special-purpose vehicles, and imported machinery, and 2% for industrial equipment and generators.

Earlier, Defender Media reported on the inaugural participants in the state concessional leasing programme: UkrEximBank, PUMB, and MTB Bank.