The programme provides for a reduction in a lessor’s remuneration. This enables defence industry enterprises classified as critical to economic functioning during the special period to gain access to vehicles and equipment at reduced rates. This will substantially ease the financial burden on businesses that support the military.
“We are creating a mechanism that reduces financial leasing costs for defence manufacturers to just 5% per year under financial leases, with the state covering the remainder. This will allow companies to invest in scaling up production, upgrading equipment, and responding more quickly to the military’s needs. The initiative will complement the affordable lending programme for defence manufacturers launched last November,” said Anna Gvozdiar, Deputy Minister of Defence of Ukraine.
The reduction of leasing payments under the state support mechanism will be delivered via authorized lessors (banks and leasing companies) that meet the criteria set out in the resolution, once they have implemented the required internal products. The Ministry of Defence will separately announce the specific institutions that will provide defence manufacturers with leasing services on preferential terms in accordance with the approved resolution.
The support will be extended to finance activities associated with the development, manufacture, repair, modernization, and disposal of weapons, military and special equipment, and ammunition, for the following purposes:
- acquisition and modernization of fixed assets of enterprises, including equipment, dual-use equipment, and technological facilities;
- acquisition of vehicles for manufacturing and commercial purposes;
- acquisition of non-residential real estate for the conduct of business activities by enterprises.
Financial leases eligible for state support must meet the following conditions:
- the maximum financing amount per agreement is not to exceed UAH 500 million (or an equivalent in foreign currency);
- the maximum term of an agreement is not to extend beyond five years;
- the maximum rate of a lessor’s basic remuneration is not to be higher than 23% per annum;
- the one-time lease fee is up to 0.75% of the financing amount.
The Ministry of Defence of Ukraine will continue its efforts to introduce and expand financial instruments to strengthen the defence industry’s capabilities and bolster national defence capacity.