Poland Eyes Export Boom for Defense Industry with EU's SAFE Instrument

Poland's defense industry is set to capitalize on substantial export opportunities thanks to the European Union's Security and Defense Fund (SAFE) Instrument. This initiative offers loans specifically for bolstering security and defense capabilities, opening new avenues for Polish manufacturers to secure international contracts.

The initial phase of allocating SAFE loans has already seen significant activity. Poland's Ministry of National Defense, primarily through the Armaments Agency, has executed over 60 agreements totaling nearly 120 billion PLN. These contracts cover a range of critical military hardware, including 146 Borsuk infantry fighting vehicles, 96 Krab self-propelled howitzers, Rak self-propelled mortars, 155mm ammunition, and various unmanned aerial vehicles.

Looking ahead, Poland plans to submit a new national plan to the European Commission detailing further purchases intended to be financed by SAFE loans. This plan requires adjustments after President Karol Nawrocki vetoed a related bill in March. Consequently, the EU loans will be channeled through the Armed Forces Support Fund, from which direct purchases for the Ministry of Interior and Administration or the Ministry of Infrastructure cannot be made. The revised plan will focus exclusively on Ministry of National Defense acquisitions, with subsequent funding for other ministries and infrastructure projects to be allocated from the defense budget.

This strategic use of SAFE funding is expected to foster collaborative international contracts, further enhancing the export potential of Polish defense firms. Grupa WB, for instance, anticipates its unmanned aerial vehicles and loitering munitions will be supplied to Romania and Canada, with contract values reaching hundreds of millions of zlotys. Norway is also showing interest in Poland's anti-drone system, San, a project involving Kongsberg, PGZ, and APS. Sweden plans to order the Ratownik vessel from PGZ Shipyard, a deal potentially representing the shipyard's largest export order, linked to Poland's own acquisition of three submarines from Saab. Interest from southern markets is also emerging, with Greece expressing a desire for Jelcz trucks, although production capacity limitations might affect this deal.