Security Action for Europe (SAFE instrument)

KEY POINTS

The SAFE instrument makes available up to €150 billion in financial assistance in the form of loans to support Member States for the acquisition of defence products and other products for defence purposes. In order to qualify for these loans, Member States are required to engage in common procurements that aim to:

• support the defence industry’s adaptation to structural changes, including by creating or expanding manufacturing capacity and related support activities;
• improve the availability of defence products, such as by reducing delivery times, reserving production capacity or stockpiling defence products, intermediate products or raw materials;
• enhance the interoperability and interchangeability of defence systems across the EU.

Scope of procurement

The conditions for common procurements¹ under SAFE require them to be carried out by:

• at least one Member State receiving financial assistance under the SAFE instrument; and
• one or more Member States, countries that are members of the European Free Trade Association (EFTA) and also members of the European Economic Area (EEA) (‘EEA EFTA states’), or Ukraine.

In addition, the common procurement may include acceding countries, candidate countries and potential candidates, and other non-EU countries that have signed a security and defence partnership with the EU.

Procurements carried out by a single Member State may also be eligible, provided that a contract is signed by 30 May 2026 and steps are taken to extend its benefit to other eligible participants.

The procurement may cover products in the following categories.

• Category I. Ammunition and missiles; artillery systems including deep precision strike capabilities; ground combat capabilities and their support systems (including soldier equipment and infantry weapons); small drones (NATO class 1) and related anti-drone systems; critical infrastructure protection; cyber; and military mobility, including counter mobility;
• Category II. Air and missile defence systems; maritime surface and underwater capabilities; drones other than small drones (NATO classes 2 and 3) and related anti-drone systems; strategic enablers (including strategic airlift, air-to-air refuelling and C4ISTAR systems, along with space assets and services); protection of space assets; artificial intelligence; and electronic warfare.

Eligibility conditions

To qualify for support under SAFE:

• contractors and subcontractors must be established and have their executive management structures in the EU, EEA EFTA states or Ukraine, and must not be controlled by non-EU countries or entities outside these areas;
• the cost of components originating outside the EU, EEA EFTA states or Ukraine must not exceed 35 % of the estimated cost of the components of the end product;
• contracts for certain defence products (category II) must ensure that contractors can define, adapt and evolve the product design without restrictions imposed by non-EU countries or other entities.

Exceptions may apply under certain conditions. For instance, entities based in the EU that are controlled by non-EU countries may participate if screening and mitigation measures under the EU’s foreign direct investment framework or guarantees verified by Member States are provided.

Participation of non-EU countries

Contractors and subcontractors from non-EU countries that have concluded a security and defence partnership with the EU can be treated as EU companies, provided a specific bilateral or multilateral arrangement aligned with the regulation is signed.

Financial terms

• Member States must submit a request for financial assistance accompanied by a European defence industry investment plan.
• Loans may be granted for a duration up to 45 years, with a grace period of up to 10 years for principal repayments.
• Pre-financing² of up to 15 % of the loan amount is available to support rapid implementation.
• The European Commission assesses requests and proposes implementing decisions, which are adopted by the Council of the European Union.

Additional features

• Procurement contracts supported under the SAFE instrument are exempt from value added tax³ (VAT).
• A situation of urgency is presumed for all procurements supported by SAFE, enabling the use of accelerated or negotiated procurement procedures without prior publication of a contract notice under Directive 2009/81/EC.
• Existing framework agreements or contracts may be amended to allow the participation of additional Member States or to increase procurement volumes.

Application deadline

Requests for financial assistance and the accompanying European defence industry investment plans had to be submitted to the Commission by 30 November 2025. All implementing decisions must be adopted by 30 June 2027.