The EU’s lending arm deployed a record €4 billion into security and defence in 2025, with a further increase to €4.5 billion planned for 2026 as Europe’s rearmament push gathers pace.
The European Investment Bank channelled more than €4 billion into security and defence last year, marking a structural shift in how Europe’s public financing institutions are approaching the sector. The bank expects that figure to rise to €4.5 billion in 2026, equivalent to 5% of its total EU financing target, according to its annual report.
Speaking at the EIB Group Forum in Luxembourg earlier this month, President Nadia Calviño announced plans to expand the Defence Equity Facility, the EIF’s anchor investment vehicle for private funds backing defence and dual-use startups.
The facility, which had an initial budget of €175 million, is expected to mobilise €1 billion, with ambitions to support up to 20 new funds across defence, space and cybersecurity.
At the Forum, the EIF also announced a €50 million commitment to Join Capital’s Fund III, targeting €235 million to back early-stage deep tech startups across Europe, marking the EIF’s largest single defence investment to date.
Underpinning the deployment is a deepening partnership with the European Defence Agency, which assessed projects worth up to €700 million for EIB eligibility in 2025.
The collaboration is designed to channel capital toward EU defence priorities, reduce fragmentation across member states and lower barriers for companies seeking institutional backing — including the kind of debt financing the EIB extended to German drone manufacturer Quantum Systems earlier this year.
The institutional push is running alongside a surge in private capital. Venture investment into European defence, security and resilience startups reached a record €4.8 billion in 2024, according to Dealroom data cited in the EIB’s Investment Report, suggesting that public and private capital are increasingly moving in the same direction.
Europe’s governments have sharply increased defence spending since Russia’s invasion of Ukraine in 2022, and the scale of that commitment is now feeding through into financing markets.
With NATO members targeting 5% of GDP on defence and security by 2035, procurement pipelines are expanding and capital gaps widening. The EIB’s evolving role of providing loans, equity and guarantees reflects a broader effort to ensure public institutions can help structure that demand.