Ukraine to join new defense alliance with low-cost weapons loans
Photo: Canadian Prime Minister Mark Carney (Getty Images)
Canada is launching a new defense financing mechanism that Ukraine will join. The initiative is designed to provide allies with access to low-cost loans for weapons procurement, Reuters reports.
Canadian Prime Minister Mark Carney announced at the NATO summit in Ankara that nine countries have expressed their willingness to join the Defence, Security and Resilience Bank (DSRB).
In addition to Canada and Ukraine, Albania, Belgium, Greece, Latvia, Luxembourg, Romania, and Türkiye have agreed to support the project. The new bank will be headquartered in Canada.
The DSRB aims to raise up to £100 billion, or about $134 billion, to provide affordable financing for defense projects in participating countries.
The bank plans to offer low-interest loans to governments and companies that struggle to secure affordable financing. It also intends to guarantee loans issued by private banks, allowing defense manufacturers to expand production.
"The Defence, Security and Resilience Bank will unlock investment, strengthen our defence industrial base, and ensure that Canada and our Allies have the capacity to meet the challenges of a more dangerous and divided world together," Carney said.
Partner countries have been asked to ratify the agreement through their national procedures. The DSRB is expected to begin operations in 2027.
In a joint statement, the nine participating countries said that Russia's full-scale war against Ukraine had demonstrated the urgent need to rapidly and significantly expand defense capabilities. The new bank is intended to improve access to capital, lower financing costs, and support the expansion of industrial capacity.
So far, however, no other major G7 country besides Canada has joined the initiative. The United Kingdom and Germany have previously kept their distance from the project, although London has said it is working closely with Ottawa on the DSRB.
The bank aims to secure a triple-A credit rating, which would allow it to raise funds on favorable terms. Major international financial institutions have already joined the project, including JPMorgan, Deutsche Bank, Commerzbank, ING, and several Canadian banks.
During the meeting in Ankara, President Volodymyr Zelenskyy announced that Canada had provided Ukraine with a major military aid package worth nearly $900 million.
The package includes military equipment, ammunition, and air defense systems.
