The Cabinet of Ministers of Ukraine has adopted a resolution developed by the Ministry of Defense of Ukraine, which introduces state financial support for defense industry enterprises under financial leasing agreements. This is reported by Army FM, the PromPolitInform portal reports.
The program provides for a reduction in the lessor’s remuneration. Thanks to this, enterprises that are determined to be critically important for the functioning of the economy during a special period in the defense industry receive access to transport and equipment at reduced rates. This will significantly reduce the financial burden on businesses that work for the needs of the military.
— We are creating a mechanism under which arms manufacturers will actually pay only 5% per annum under financial leasing agreements. The state will compensate for the rest of the financing cost. This will allow enterprises to invest in expanding production, modernizing equipment, and more quickly meet the needs of the military. This mechanism will complement the affordable lending program for gunsmiths, which was introduced in November last year, – noted Deputy Minister of Defense of Ukraine Hanna Gvozdiar.
State financial support by reducing the cost of leasing payments will be provided through authorized lessors (banks and leasing companies) that meet the criteria established by the resolution, after the lessors introduce the necessary domestic products. The Ministry of Defense will separately notify about specific institutions that will provide gunsmiths with leasing services on preferential terms in accordance with the approved resolution.
Support will be provided to finance goals related to the development, manufacture, repair, modernization and disposal of weapons, military and special equipment, ammunition, for the purpose of:
- acquisition and modernization of fixed assets of enterprises, in particular equipment, dual-purpose equipment and technological equipment;
- acquisition of vehicles for production and commercial needs;
- purchase of non-residential real estate for conducting business activities of enterprises.
Financial leasing agreements, under which state support may be provided, must meet the following conditions:
- maximum amount of financing under one agreement — up to UAH 500 million (or equivalent in foreign currency);
- maximum term of the agreement — up to 5 years;
- maximum amount of the lessor’s basic remuneration — no more than 23% per annum;
- one-time commission for providing leasing services — up to 0.75% of the financing amount.
The Ministry of Defense of Ukraine will continue to work on the implementation and scaling of financial instruments that strengthen the capabilities of the defense industry and strengthen the defense capability of the state.
