EU to invest EUR1bn into new defence projects

The European Commission will invest EUR1 billion into new defence technology projects this year, with 21% going towards SMEs.  

An announcement from the commission on 15 April says that this funding will be awarded across 57 different projects in total, spread across R&D and capability development. Of these, SMEs will make up 38% of the 634 participants.  

The projects will cover a range of technologies such as AI, cyber defence, drones, and counter-UASs and were selected following the 2025 European Defence Fund (EDF) call for proposals.  

Together these investments will also provide funding for the EU’s four major defence projects – the European Drone Defence Initiative, Eastern Flank Watch, European Air Shield, and European Space Shield. 

Twenty-three projects focused on “disruptive” non-thematic calls will be allocated EUR27 million. Across these projects, a total of 126 SMEs will work on overcoming technological challenges, such as developing secure human-AI dialogue systems. 

Several of the projects are also focused on the mass-production of drone munitions and are launching “sub-calls” for startups and SMEs. Selected companies will receive up to EUR60,000 to integrate new technologies.  

For example, the ‘Eurodamm’ project, which aims to deliver a system for pairing reusable carrier UAVs with attritable missiles, is providing financial support to smaller companies. Likewise, the ‘D-storm’ project will see SMEs help to develop interoperable, affordable, and mass-produced loitering munitions and UASs.

According to the commission, these projects are intended to attract new talent and help companies enter the defence market. Ukrainian companies are eligible to apply. 

Speaking to DSEI Gateway, a spokesperson from the European Commission said that the EDF helps companies to develop “competitive” defence projects. These will result in the delivery of “innovative and interoperable” platforms.  

Defence readiness in Europe  

The commission says that the projects will support key milestones of the Defence Readiness Roadmap 2030, which outlines how to bolster European capabilities. 

The spokesperson added that the projects will contribute to the overall security and defence of the EU: “Funded projects should enable the European Commission to respond to the needs of member states while targeting critical capabilities that are essential for the future.”  

The commission notes that the 2025 EDF call for proposals attracted 410 submissions, representing a 37% increase from the previous year. 

Grant agreement preparation between the commission and the companies taking part will now begin. The commission aims to sign agreements before the end of the year.  

The new funding means that the EU has now invested more than EUR5 billion into collaborative defence R&D since 2021.