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The initiative will support the development of dual-use technologies, receiving €175 million in equity from the European Commission and the European Investment Fund.
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The European Commission (Directorate General for Defence Industry and Space) has partnered with the European Investment fund to launch the Defence Equity Facility (DEF), the European Commission announced today.
The DEF has €175 million in equity to provide venture capital and private equity funds to support the development of European dual-use technologies over the next four years.
The initial equity provided by the European Defence Fund and EIF, €100 million and €75 million, respectively, is expected to attract additional private investment in defence innovation.
The fund is expected to grow to €500 million.
In addition to providing equity, new initiative will also provide capability-building activities for fund managers.
European Commissioner Thierry Breton explained that the fund was integral to stimulating European defence innovation.
“With the Defence Equity Facility, we deliver a first step in improving access to finance for the defence sector,” Breton said.
“This initiative will contribute to sending a positive signal to the market and stimulate private investments in support of defence innovation. It is a key pillar of the EU Defence Innovation Scheme, which aims to enhance Europe's technological competitiveness and security, by supporting to a thriving ecosystem of defence start-ups and SMEs.
“It is a first step and we will continue to work with the EIB and EIF to support access to finance in the defence sector.”
Roger Havenith, deputy chief executive of the European Investment Fund, explained that the new fund will help drive European growth.
"Our partnership with the European Commission, under the European Defence Fund, represents a significant milestone in our efforts to drive investment and innovation in a sector of strategic importance for Europe,” Havenith explained.
“By supporting private equity and venture capital funds targeting investments in defence technologies with dual-use potential, we aim to catalyse economic growth and foster a thriving entrepreneurial ecosystem in the area of security and defence.”
It is hoped that advanced defence innovation will enable European nations to better safeguard their own security, Kris Peeters, vice-president of the European Investment Bank (EIB), said.
"This is a significant step towards promoting innovation and security in the EU. This partnership will further enhance European defence capabilities in an increasingly interconnected world facing new geopolitical challenges.
“The Defence Equity Facility will contribute to the objectives of EIB’s Strategic European Security Initiative and play a key role in promoting state-of-the-art technologies contributing to EU’s defence and security, confirming this strategic area as a priority for the EIB Group.”
