Frozen Russian Assets Fund €390M for Ukrainian Defense Industry

Frozen Russian assets worth €390 million ($402 million) and international contributions have bolstered Ukraine’s defense industry through the 2024-launched "Danish model" financing initiative.

The Danish model involves Ukraine identifying defense projects needing funding, while Danish experts evaluate manufacturers' capacity and contract reliability. Notable outcomes include self-propelled "Bogdan" artillery systems, long-range drones, and anti-tank and anti-ship missiles.

The program, spearheaded by Ukraine and Denmark, has enabled weapons purchases worth nearly €538 million. This includes €125 million from Denmark, €20 million from Sweden, €2.7 million from Iceland, and interest on frozen Russian assets.

“We are grateful to Denmark for their unwavering support and leadership,” said Ukraine’s Defense Minister, Rustem Umerov. “This cooperation strengthens our battlefield capabilities and supports our domestic industry during wartime.”

Danish Defense Minister Troels Lund Poulsen commended Ukraine’s defense industry for its efficiency, emphasizing the need for more countries to adopt similar initiatives.

In addition to swift delivery and competitive pricing, Ukrainian-made weapons offer logistical advantages such as training and maintenance near the front lines. These contracts also sustain Ukraine’s economy, preserving jobs and advancing local industries.

Denmark and Norway are set to allocate €178 million ($183 million) to purchase arms from Ukrainian manufacturers in 2025, with Denmark committing €135 million ($139 million) under the "Danish model" and Norway adding €43 million ($44 million).

Denmark has presented its latest donation package XXIII to Ukraine, which includes financial contributions to air defense, infantry fighting vehicles, and further support for Ukraine's combat aircraft capacity. Minister of Defense Troels Lund Poulsen said he had presented a long-term plan to help build Ukraine's air force, noting steps like pilot training and the donation of F-16 aircraft. He added that much work remains, particularly in expanding and professionalizing Ukraine's F-16 capacity and strengthening its air force.

Other European nations have followed suit. Lithuania plans to invest €10 million ($10.3 million) in producing Ukraine’s Palianytsia long-range drone-missile.

Meanwhile, the Netherlands recently announced €1 billion ($1.1 billion) in 155mm artillery ammunition purchases and confirmed an additional €2 billion ($2.2 billion) in military aid allocated in the last quarter, including F-16 fighter jets and drone contracts. These contributions were highlighted during the 25th Ukraine Defense Contact Group meeting, a coalition of more than 50 countries supporting Ukraine.