Lithuania to request new defense loan installment in September
Translated from Lithuanian, summarized and contextualized by DistantNews.
At a glance
News
Official statement
New plan
- Lithuania received a 956 million euro advance payment in June from a 6.375 billion euro SAFE loan for defense.
- Further payments depend on Lithuania meeting specific targets, such as publishing tenders and signing contracts.
- The loan, part of an EU instrument to bolster defense, will fund national defense investments, including air defense and ammunition, under favorable borrowing terms.
Lithuania received an advance payment of 956 million euros in late June from the 6.375 billion euro SAFE loan allocated for defense purposes. This initial disbursement represents 15% of the total loan amount. According to the Ministry of Finance, subsequent payments are contingent upon Lithuania's progress in meeting predefined indicators.
Other payments will be made according to the achieved indicators (e.g., published public procurement, signed contract, advance paid to the manufacturer, part of the equipment received, final amount paid, all equipment received, etc.) – the Ministry of Finance, having received information from the Ministry of National Defence, will submit payment requests to the EC for partial loan disbursement.
These indicators include the successful publication of public tenders, the signing of contracts, the payment of advances to manufacturers, and the receipt of military equipment. The Ministry of Finance will submit payment requests to the European Commission based on information provided by the Ministry of National Defence regarding these achievements. The next such request is due by September 30th, with funds expected to reach Lithuania within two months of submission.
The next such request to the EC must be submitted by September 30, and the disbursement should reach Lithuania within 2 months of the request submission.
The Ministry emphasized that the disbursement of the SAFE loan and the Ministry of National Defence's procurement activities are not directly time-linked. Funds from the loan are integrated into the overall state borrowing needs, while defense procurements are financed from appropriations approved in the state budget.
It is important to note that the loan disbursement and the procurements carried out by the Ministry of National Defence are not directly linked in time. The received SAFE loan funds go into the overall borrowing needs of the Ministry of Finance, and the Ministry of National Defence carries out procurements from the approved state budget allocations.
The SAFE loan will finance defense investments already planned within the state budget, but under more favorable borrowing conditions. Lithuania intends to allocate these funds towards the development of its national division, with a significant portion directed towards air defense capabilities. Additionally, the loan will support the acquisition of combat, support, and logistical systems, ammunition, counter-mobility tools for the Baltic defense line, and the maintenance and development of other Lithuanian Armed Forces capabilities. The SAFE instrument is a temporary European Commission facility designed to strengthen defense, operating until the end of 2030, with a total volume of 150 billion euros.
The SAFE loan finances defense investments already planned in the state budget, but under more favorable borrowing conditions. Therefore, the funds are not a separate financing mechanism detached from the defense budget.
DistantNews Editorial
Originally published by Delfi in Lithuanian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.
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