Portugal formalizes interest in joining the Defense loan program

The Government today formalized its expression of interest in joining the European program of loans on favorable terms to strengthen Defense, a mechanism it intends to use to cover priority needs of the Armed Forces.

To this end, the Minister of National Defense, Nuno Melo, created a working group that will develop the proposal for expression of interest and “subsequent formal request for financial assistance,” the ministry said in a statement.

At issue is the SAFE initiative created by the European Commission to support Member States in urgent investments in the Defense technological and industrial base, through loans with terms of up to 45 years, grace periods of up to 10 years and the possibility of pre-financing of up to 15%.

At the end of May, the Council of the European Union adopted this package of €150 billion in loans on favorable terms for joint purchases to strengthen Community defense.

According to the Ministry of Defense, after submitting the expression of interest, the SAFE working group will enter the next phase for which it was mandated, focusing on the technical development of the projects and preparing the formal request for financial assistance by November 30, 2025.

"This request will be accompanied by a detailed investment plan for the European defense industry, with a special focus on integrating national industry into future value chains promoted by projects financed under SAFE," the statement said.

Nuno Melo's ministry also stated that the Government aims to use this mechanism to cover the priority needs identified in the three branches of the Armed Forces, also assuming "leadership in two of these joint contracting projects."

At the same time, and according to the statement, Portugal intends to align all investments made in this area with NATO's objectives, in order to amplify the operational capabilities that were identified in the strategic design of the Portuguese force system and its international commitments.

The projects presented cover munitions, satellite systems, ground systems, naval platforms, unmanned systems and other capabilities, the ministry listed, adding that the European Commission should indicate during the month of August the amount of the 'financial envelope' destined for Portugal.

Following the formal request for financial assistance under SAFE, which must be made by November 30, and the formal decision by the Council of the European Union in January 2026, pre-financing amounts may begin to be made available in the first half of 2026, with several projects expected to officially begin with the arrival of the first funds, the ministry said.