Brussels unlocks €1.5 billion for the defence industry

The European Commission on Monday adopted the work programme for the European Defence Industry Programme (EDIP), with a budget of €1.5 billion for the 2026–2027 period, focusing on the European defence industry, cooperation with Ukraine, the joint procurement of equipment by several states, and support for SMEs and start-ups in the sector. The new allocation of funds sets out how the programme, approved in December 2025, will be rolled out, and a first round of calls has already been opened on the EU Funding and Tenders Portal.

The adoption of the work programme gives operational shape to one of the instruments through which the European Union seeks to intervene in its defence industrial base. The scheme approved by Brussels provides for grants for production, joint procurement, industrial projects of common interest and support mechanisms for smaller companies. The European Commission is directing the bulk of the funding towards the manufacture of components and products deemed to be priorities, with a specific strand for the Ukrainian industry.

New opportunities for companies under EDIP

IRA – Industrial Reinforcement Actions – Production of defence components and products

With a budget of €700 million, IRA is the largest component of EDIP.

Under this strand, €440 million will be channelled into increasing the production of energetic components, key electronic components, defence platforms and end products.

First call, with a deadline of 16th June 2026:

• Energetic components (€166.4 million), with a particular focus on propellant powders, explosives, propulsion systems, warheads and electronic fuses, filling plants, and access to the relevant raw materials.
• Maximum EU contribution: €30 million per project.

A further €260 million will be channelled through EDIP’s own Ukraine Support Instrument (USI), with the aim of funding collaborative projects to increase Ukraine’s defence industrial capacity, reduce production lead times, strengthen cross-border collaboration between Ukrainian and European companies, and integrate the Ukrainian defence industry more closely into the European Defence Technological and Industrial Base.

First call, with a deadline of 13th October 2026:

• Missiles, ammunition and bombs (€180 million), with a particular focus on air defence missiles and ammunition (including counter-UxS systems), deep-strike capabilities (including long-range missiles), and rockets, guided bombs and loitering munitions.
• Maximum EU contribution: €30 million per project.

European Defence Projects of Common Interest

The programme also sets aside €325 million for the so-called European Defence Projects of Common Interest (EDPCI). These are collaborative industrial initiatives designed to involve several countries and generate broader effects within the EU. According to the European Commission, these projects will be open not only to Member States but also to Norway and Ukraine, thereby widening participation beyond the strict EU framework. The aim of this strand is to launch and implement joint projects of a European scale, at a time when Brussels is seeking to reduce the fragmentation of national programmes and encourage greater industrial coordination.

Joint procurement of equipment

Another part of the programme is focused on the joint procurement of equipment. The Commission will allocate €240 million to support purchases made by consortia of contracting authorities made up of Member States and Norway. The areas mentioned in the press release issued on Monday include counter-drone, air defence and anti-missile systems, as well as land and naval combat systems. Grants may amount to a maximum of €20 million per project. This instrument does not fully finance the acquisitions; rather, it is intended to support cooperation in procurement processes, one of the areas where the EU is seeking to address fragmentation between national markets.

The first call will close in October 2026 and the second in February 2027.

Transforming supply chains

The programme also includes a financial arm aimed at the smaller-business segment. A total of €100 million will be allocated to the Fund to Accelerate the Transformation of Defence Supply Chains (FAST). The purpose of this fund is to facilitate equity support for start-ups in the sector, small and medium-sized enterprises, and small mid-cap companies. In practical terms, the measure introduces a mechanism to improve access to finance in an area where many companies face barriers to scaling up production, joining supply chains or taking part in multinational programmes.

Defence Innovation Action – BraveTechEU

As part of the USI, the BraveTechEU initiative has also been added, a new defence innovation programme that will receive an additional €35.3 million from EDIP’s Ukraine Support Instrument. The European Commission states that this funding will be directed to both Ukrainian and European industries, with particular attention to start-ups and SMEs. Its stated purpose is to support technological developments linked to needs identified on the ground and to strengthen the competitive position of the European industry.

A programme already under way

From a business perspective, the launch of the programme opens up a new timetable of opportunities for manufacturers, technology integrators, component suppliers and companies with the capacity to develop dual-use solutions (with potential civil and military applications) or specialist ones.

Valeria Pérez de Ciriza, Head of Security, Defence and Space knowledge area at Zabala Innovation, believes that “the launch of the programme creates a concrete pathway for companies of different sizes, including SMEs and start-ups, to join European consortia, submit projects and access funding in areas where the scope for participation had so far been more limited”. In her view, EDIP’s design is not confined to large platforms or major industrial groups, but also includes instruments to mobilise broader supply chains.

The activation of EDIP’s work programme comes at a time when defence industrial policy has gained prominence on the EU agenda. Brussels is now translating that strategy into figures, funding windows and types of eligible projects.