Ukraine's Defence Ministry signs first state-guaranteed contracts for armoured vehicles with private company worth US$106 million

Ukraine's Defence Ministry has signed the first state-guaranteed contracts with a Ukrainian private company.

Source: press service for Ukraine's Defence Ministry

Details: The contracts, valued at UAH 4.4 billion (about US$106 million), will see the company produce and deliver 100 specialised armoured combat vehicles and 100 armoured evacuation vehicles.

The agreements stipulate that the manufacturer will raise loan funds to fulfil the contract, and the state will provide appropriate guarantees for loan repayment from the state budget.

For security reasons, the details of the contracts are not disclosed.

"These contracts open a new page in cooperation between the Ministry of Defence and the private sector. The conclusion of contracts involving state guarantees is an important signal to businesses: the state is ready to support responsible manufacturers capable of providing the military with modern solutions and quality products," commented Dmytro Klimenkov, Ukraine's Deputy Defence Minister.

Hlib Kanievskyi, Director of the Defence Ministry's Procurement Policy Department, noted that the state budget for 2024 provides up to UAH 30 billion (about US$724 million) for state guarantees for contracts aimed at improving the defence and security of the state.

"State guarantees are an additional financial instrument for the procurement of military equipment for the Armed Forces with a long production cycle. With the help of such guarantees, the Ministry of Defence is scaling up the capabilities of the domestic defence industry," Kanievskyi added.

Contracts under state guarantees are a separate area of defence procurement reform and provide for new conditions for partnership with businesses, which is critical to meeting the needs of Ukraine's Armed Forces, the Defence Ministry said.

Background: In 10 months of 2024, the Ministry of Defence signed contracts for Ukrainian-made robotic systems worth UAH 300 million (about US$7.2 million).

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