EU funds Ukrainian defense industry with €400 million from frozen Russian asset proceeds

The European Union has allocated €400 million from the proceeds of frozen Russian assets to support Ukraine’s defense industry, including the production of Bohdana self-propelled howitzers, according to EU Ambassador to Ukraine Katarína Mathernová.

Earlier, the EU allocated €160 million from Russian asset proceeds to address Ukraine’s urgent humanitarian needs for the upcoming winter. In June, European Commission President Ursula von der Leyen announced that $1.6 billion from immobilized Russian assets would be allocated, with 90% directed towards defense and 10% towards reconstruction efforts.

In an interview with Interfax-Ukraine published on 19 September, Mathernová revealed that this funding is part of a larger initiative to support Ukrainian defense production.

“A major innovation is that €400 million was directed straight to the Ukrainian defense industry. This is to support the Ukrainian defense industry, which produces faster and cheaper. And in this way it’s more convenient for logistics. And it supports the Ukrainian economy,” Mathernová stated.

Denmark played a leading role in facilitating this process, channeling funds to the Ukrainian defense industry. Mathernová explained,

“Denmark was the first. So we turned to them to help us direct the funds received from frozen assets. We provided €400 million for the purchase of Ukrainian-made weapons. And that’s not all.”

In July, Denmark signed an agreement to fund the local production of 18 Ukrainian Bohdana self-propelled artillery units for the Ukrainian Army, becoming the first country to support this type of purchase. The Ukrainian military received the howitzers in September.

Ambassador Mathernová disclosed that out of 18 Bohdanas purchased, two-thirds were financed by the EU using funds obtained from profits on frozen Russian assets.

The 2S22 Bohdana, a Ukrainian 155 mm NATO-caliber self-propelled howitzer, completed trials in January 2022 and first engaged in June during the battle for Zmiinyi (Snake) Island, destroying a Russian “Pantsir” missile system and a radar station. It has a firing range of up to 50 km, depending on the type of round used.

This funding is part of a broader EU support package. Mathernová said,

“Even before the discussion about using frozen Russian assets to obtain a €50 billion loan began, the EU had already approved the use of excess profits from frozen Russian assets. And the first €1.4 billion has already been paid out a month ago. In August this year, €1.4 billion was paid out. €1 billion went to several member countries that will deliver weapons to Ukraine this fall.”

While unable to specify the exact increase in future allocations for the Ukrainian defense industry, as decisions are not yet finalized, Mathernová assured that the amount would increase.

Katarína Mathernová assumed her position as EU Ambassador to Ukraine in September 2023.

Related:

You could close this page. Or you could join our community and help us produce more materials like this. We keep our reporting open and accessible to everyone because we believe in the power of free information. This is why our small, cost-effective team depends on the support of readers like you to bring deliver timely news, quality analysis, and on-the-ground reports about Russia's war against Ukraine and Ukraine's struggle to build a democratic society. A little bit goes a long way: for as little as the cost of one cup of coffee a month, you can help build bridges between Ukraine and the rest of the world, plus become a co-creator and vote for topics we should cover next. Become a patron or see other ways to support. Become a Patron!