Latvia to receive €3.5 billion from EU security fund for defense development
Latvia will sign a loan agreement with the EU on June 20, securing €3.5 billion to strengthen defense and security capabilities. The first installment of €524.7 million is expected within weeks.
On Saturday, June 20, a signing ceremony for the European Union's "Security Action for Europe" (SAFE) financial instrument loan agreement will take place at the Cabinet of Ministers. The agreement allocates €3.5 billion to Latvia for the development of defense and security capabilities, according to the Ministry of Defense.
The first tranche of €524.7 million is expected to be received within a few weeks after signing. Previously reported, the €3.49 billion loan is intended for the purchase of armored vehicles, air defense systems, and other military assets.
The Cabinet of Ministers has already approved the use of SAFE funding for the procurement of drones, guided missiles, and anti-drone systems to accelerate the development of the National Armed Forces. A decision has also been made to acquire three medium-class helicopters for the State Border Guard.
The ceremony will be attended by Prime Minister Andris Kulbergs, EU Commissioner for Defense and Space Andrius Kubilius, Defense Minister Raivis Melnis, and Finance Minister Māris Kučinskis. Kučinskis emphasized that the SAFE loan has lower servicing costs than borrowing on financial markets.
SAFE is a loan instrument, not a grant, created by the EU to address critical defense capability gaps and strengthen the European defense industry. It provides simplified procurement procedures for faster orders.
The ministries of Defense and Interior have already signed several contracts with EU and Canadian manufacturers to be financed through SAFE. All deliveries must be completed by the end of 2030.
The funding is planned to be invested in the development of the Mechanized Infantry Brigade, providing armored vehicles and combat support capabilities, as well as divisional-level support units including artillery, air defense, and reconnaissance. Funds are also allocated for munitions stocks and combat support capabilities for both national and NATO units.
