Poland plans to invest USD 2 billion in defence companies

By Maciej Lew-Mirski (Senior Defence Advisor at NGL Advisory)

The Polish government plans to introduce mechanisms to support the national defence sector through the establishment of the National Defence Sector Support Fund for the years 2024-2027, with a budget of no less than PLN 8.5 billion.

 

According to the project of the Council of Ministers resolution on the national defence sector support system the current geopolitical situation and the ongoing armed conflict in Ukraine necessitate an increase in the potential of the national defence industry. Recognizing the need for a significant increase in defence expenditures, it is crucial not to overlook the necessity of increasing investments in the Polish defence industry, capable of responding to the needs of the Polish Armed Forces. As demonstrated by the year-long conflict in Ukraine, the existing capabilities of the defence industry may be insufficient in a conflict scenario that could extend to Poland or countries directly bordering the Republic of Poland.

 

 

This industry faces tasks that require government support. High expenditures on acquired equipment and armaments must go hand in hand with the production and service capabilities of the defence industry located within the country. Further announced contracts further justify the necessity and immediacy of such expenditures – including the Polishization of tanks Hyundai Rotem K2, self-propelled K9 howitzers from Hanwha Aerospace and the planned purchase of state of the art Rosomak IFVs from Huta Stalowa Wola S.A. by Ukraine.

Considering the circumstances described above and addressing the urgent need to implement a systemic solution to support the national defence sector, an initiative has been launched to establish the National Defence Sector Support Fund. The resolution will allow for precise determination of the recipients of the process and expedite actions related to the establishment of the aforementioned Fund.

 

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The Council of Ministers resolution authorizes the minister responsible for state assets, acting in agreement with the Minister of National Defence, to prepare a draft law establishing the National Defence Sector Support Fund for the years 2024-2027, with a budget of no less than PLN 8.5 billion. The Fund is intended to provide support to entities in the national defence sector, especially for their ongoing or planned development investments.

As a transitional solution, the Council of Ministers has the option to allocate funds in the amount of no less than PLN 3.6 billion from the Repatriation Fund mentioned in Article 56 of the Act of August 30, 1996, on commercialization and certain entitlements of employees, to support development investments of entities in the national defence sector planned or carried out in 2023.

 

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