EIMIN, the Ministry of National Defence (KAM) and the National Development Bank (ILTE) have allocated €40 million to the development of defence technologies

An amendment to the Defence Investment Fund (GIF) agreement has been signed by the aforementioned ministries and the ILTE, continuing funding in the form of venture capital investments for innovative Lithuanian defence and security sector companies. EIMIN is providing €30 million for this fund, while KAM is providing €10 million.

This is the second investment programme of its kind, aimed at investing in the development of new defence technology ideas, strengthening innovation teams, developing advanced products and promoting experimental development and innovation that contribute to the creation of a modern and competitive Lithuanian defence industry.

'The defence and security sector is becoming an increasingly important part of the high-tech industry and the economy as a whole, so we are consistently investing to ensure that Lithuanian start-ups, especially those in the early stages of development, have better access to venture capital and that their defence and security innovations contribute to strengthening the country's security and long-term economic development.' Market assessments show that the need for venture capital in this sector is growing at all stages of investment. The projected funding gap by 2027 is around €70 million, so this type of investment instrument is strategically necessary,' says Edvinas Grikšas, Minister of the Economy and Innovation.

'In implementing the Lithuanian government's programme, the Ministry of National Defence is allocating €10 million to a venture capital measure that will promote the growth of defence industry companies. This portion of the funds will be invested through GIF, which was established by the Ministry of National Defence in 2020 and is currently managed by EIMIN. The new venture capital instrument, MILInvest-2, will ensure continuity with the previous financial instrument, MILInvest. When developing the defence and security industry, priority will be given to the needs of the Lithuanian Armed Forces and to strengthening key defence capabilities,' said the Minister of National Defence, Robertas Kaunas.

The fund's investments will be allocated to companies established in Lithuania, the EU, NATO countries or Ukraine. However, a prerequisite is that the benefits must accrue to Lithuania, for example through job creation or tax payments.

The National Development Bank ILTE plans to select two fund managers to implement pre-acceleration and acceleration programmes and invest in promising companies in the defence and security sector.

'Today, it is clear that the need for venture capital in the defence and security sector is constantly growing, so this type of financing allows companies to implement and test technological ideas more quickly. This funding will help to fill the investment gap and strengthen Lithuania's contribution to the overall NATO defence ecosystem,' said Dainius Vilčinskas, ILTE's Director General.

In the first stage, the state allocated €13.5 million to develop innovations in the defence sector, and more than €5 million was attracted from private funds.