Facing a $27 billion defence funding shortfall, Ukraine is asking its European allies for more than just military deliveries as it pursues joint weapons production to sustain its armed forces, according to recent reports. Kyiv has intensified its push for co-production agreements within European Union territory to offset domestic budget constraints and maintain a steady stream of critical military equipment.
Kyiv’s Push for European Co-Production
Since mid-2025, Ukrainian authorities have stepped up efforts to build defence industrial partnerships across Europe, prioritizing joint ventures that manufacture weapons within EU borders. According to reporting, the preferred model relies on European partners to finance the expansion of serial production and provide necessary technology and manufacturing capacity. Ukrainian firms contribute essential know-how and integration expertise, specifically in reconnaissance, interceptor, and strike drones, alongside electronic warfare systems and target coordination tools.
This industrial strategy serves a dual purpose for Kyiv. Beyond meeting the immediate operational requirements of the Armed Forces of Ukraine, Ukrainian companies aim to secure a foothold in the broader European market. Meanwhile, participating EU states seek to enhance their own domestic production capabilities. Ukrainian authorities also intend to use these joint ventures to retain skilled personnel within the sector, preventing the migration of vital engineering and manufacturing expertise to Western Europe.
The Build with Ukraine Initiative and Bilateral Partnerships
Launched in June 2025, the “Build with Ukraine” initiative seeks to establish manufacturing lines directly in European countries through intergovernmental agreements and joint ventures between Ukrainian and Western defence firms. Under this framework, Ukraine supplies skilled labor and specialized knowledge, while Western partners contribute capital, production infrastructure, and certification capabilities that smooth the path to EU markets.
Bilateral cooperation remains uneven across the continent. Ukraine maintains its most developed partnerships with Germany, the United Kingdom, and Denmark, though these ties are still evolving. Polish-Ukrainian defence industrial cooperation intensified following the full-scale Russian invasion in 2022, driven largely by the relocation of Ukrainian defence companies to Central Europe. However, intergovernmental agreements signed at the turn of 2025 and 2026 to expand the “Build with Ukraine” framework have faced implementation delays.
Navigating Funding Models and Export Hubs
The current push complements earlier financing mechanisms. In 2024, allies established the “Danish model,” under which EU member states directly invest in arms manufacturing inside Ukraine. However, not all European capitals are comfortable investing within Ukraine’s borders due to persistent missile and drone threats, prompting the pivot toward joint ventures located safely inside EU territory.
To further globalize its defence industry, President Volodymyr Zelensky announced plans in February to establish ten overseas defence export hubs by the end of 2026. Cities slated to host these hubs include London, Berlin, and Copenhagen, signaling Kyiv’s long-term ambition to transform its wartime innovations into a globally competitive export sector.
Frequently Asked Questions
- What is the primary goal of Ukraine’s defence industrial strategy in Europe? Ukraine aims to secure co-production agreements and joint ventures within EU territory to manufacture drones, electronic warfare systems, and other critical military equipment funded by European partners.
- What is the “Build with Ukraine” initiative? Launched in June 2025, it is a program designed to establish Ukrainian-Western manufacturing lines inside European countries using intergovernmental agreements and joint ventures.
- Which countries are currently the main partners in this effort? Ukraine’s most developed bilateral cooperation involves Germany, the United Kingdom, and Denmark, alongside Central European nations like Poland, Slovakia, and the Czech Republic.
- How are these production projects funded? Current joint arms production within the EU is largely directed toward Kyiv’s immediate needs and financed through partner countries’ support for Ukraine.
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