Posted By Global Banking and Finance Review
Posted on June 11, 2025
LONDON (Reuters) -The EU's lending arm, the European Investment Bank, has tripled a scheme to help fund the bloc's defence industry to 3 billion euros ($3.43 billion) and signed a deal with Germany's Deutsche Bank to start funnelling the money to the bloc's military firms.
The EIB announced on Wednesday it would provide a 500 million-euro loan to the German lender which will then onlend the money to small and medium-sized firms throughout the EU's security and defence supply chain.
It is the first time the EIB has provided so-called intermediated financing for the defence sector and is expected to announce a similar deal with France's BPCE next week and other banks around the bloc in the coming weeks.
The EIB is prohibited from investing directly in weapons but it has started investing more broadly in the defence sector over the last year as part of Europe's efforts to build up its security capabilities.
The bank's President Nadia Calviño announced the plan at a summit in Brussels saying that strengthening Europe’s security and defence was now "central" to the bank's mission and would help address "the urgent need for investment" in the sector.
The threefold increase in the EIB’s lending, which was initially approved in December, reflected exceptionally strong interest by commercial banks across Europe to be involved in the defence ramp up efforts, the EIB added in a statement.
($1 = 0.8746 euros)
(Reporting by Marc Jones; Editing by Sharon Singleton)
