1. Budget signals every investor should note
| Line-item (baseline) | 2026 | 2027* | 2028* | What it means for partners |
|---|---|---|---|---|
| Total security & defence outlays | ₴1.817 trn (~€41 bn) | ₴1.439 trn | ₴1.384 trn | Three-year envelope guarantees order continuity even in a “post-cease-fire” scenario. |
| Medium-term weapons contracts | ₴134.3 bn | ₴124.4 bn | ₴10.9 bn | Long-lead projects (air-defence, missiles, UAVs, C4ISR) to be tendered or co-produced with foreign firms. |
| BRAVE1 innovation grants | rolling | rolling | rolling | Non-dilutive capital for dual-use AI, EW, robotics—matched by venture funds. |
*Assumes gradual improvement in security conditions after 2026.
2. New International Defence Capability Fund (Coalition of the Willing)
“Kyiv proposes a dedicated multi-partner vehicle to co-finance procurement, localisation and sustainment. Contributions will be ring-fenced for vetted Western and Ukrainian suppliers.”
— Budget Declaration 2026-28
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Structure: Grant-plus-soft-loan facility managed jointly by Ukraine’s MoD and partner states.
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Eligible projects: UAVs, loitering munitions, ground-based air defence, battlefield digitisation, MRO hubs.
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Preferred criteria: ≥65 % value-added in Ukraine/EU/EEA; option for IP-sharing and local assembly.
3. Investment windows opening now
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Co-production & localisation
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State guarantee of minimum five-year off-take under medium-term contracts.
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Tax holidays (0 % profit for 10 yrs) in defence industrial parks; duty-free import of production equipment.
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Minority equity or JV in Ukrainian OEMs
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Fast-track antitrust clearance; National Bank FX-repatriation guarantees.
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Supply-chain integration
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Ukraine’s NATO-compliant standards (DEF(AIR)STAN mirror) allow component interoperability; offsets negotiable.
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R&D and venture
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BRAVE1 provides grants up to US$4 m per project; foreign VCs can co-invest on pari-passu terms.
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4. Near-term procurement priorities (MoD market sounding Q3-Q4 2025)
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Counter-UAS & SHORAD: radar sensors, kill-chains, directed-energy pilots.
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155 mm & 120 mm ammunition lines: tooling, energetics, NATO-spec QA.
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Multi-spectral ISR drones: 100–500 km range, AI-enabled targeting.
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Secure comms & battlefield cloud: zero-trust architecture, satellite back-up.
Quote:
“The 2026–28 fiscal horizon moves Ukraine from emergency buys to structured, NATO-oriented force planning. Foreign industry that partners now will anchor the supply chain for a €40-billion annual market.”
— Serhiy Boev, First Deputy Defence Minister
