Ankara: Nine countries have committed to supporting the creation of a new international bank aimed at helping governments and companies finance defence, security and resilience projects. The initiative, led by Canada, comes as many countries are trying to strengthen their military industries and increase defence production.
Canada, Albania, Belgium, Greece, Latvia, Luxembourg, Romania, Türkiye and Ukraine have declared their intention to establish the Defence, Security and Resilience Bank. The announcement was made as NATO leaders gathered in Ankara for talks focused on security, defence spending and military cooperation.
The proposed bank is expected to help governments and defence companies gain access to more affordable financing. Supporters of the project believe it could eventually mobilise up to £100 billion, which is about $134 billion, for defence and security related investment.
The idea behind the bank is to create a financial institution that can borrow money at favourable rates and provide loans and guarantees for important projects. Organisers hope the bank will eventually receive a top credit rating, allowing it to raise money at lower costs in international financial markets.
One major aim of the project is to support smaller and medium sized companies involved in defence production. Many of these businesses face difficulties when trying to obtain loans from traditional banks. Supporters of the new institution say better access to finance could help companies build factories, expand production lines, develop new technology and strengthen supply chains.
The Canadian government said negotiations held in Montreal in April helped participating countries agree on the founding framework for the proposed institution. Canada has been selected as the location of the future global headquarters, while Luxembourg is expected to serve as the bank's European base.
The announcement marks progress for Canada's efforts to build international support for the initiative. However, Canada remains the only member of the Group of Seven major economies among the nine countries that have publicly committed to the plan.
Other European countries are also considering different ways of financing growing defence needs. Britain, the Netherlands, Finland and Poland have been working on a separate initiative known as the Multilateral Defence Mechanism. Britain has also indicated that it is willing to cooperate with Canada on the proposed global defence bank.
The development shows that governments are exploring several financial models as they try to increase military production and meet new security demands. Defence spending has risen sharply in importance following years of conflict and political tension in Europe and other parts of the world.
Ukraine's involvement is especially significant because the country has gained extensive experience in modern warfare and defence production. Its participation could help shape discussions about how the proposed bank supports military manufacturing, technology development and long term security needs.
The proposal also comes at a time when NATO members are under pressure to turn promises of higher defence spending into real military capacity. Governments need to purchase equipment, expand production, improve infrastructure and invest in new technologies, including systems designed to respond to drones and other modern threats.
For many countries, the challenge is not only deciding how much to spend on defence but also finding practical ways to finance large projects over many years. Supporters believe the new bank could help reduce financial pressure by offering long term funding and sharing risks among participating countries.
However, several important questions remain. The founding countries still need to decide how much capital they will contribute and how the institution will operate in practice. The bank will also need to attract additional members, especially larger economies, if it is to reach its full financial potential.
There are also questions about how the new bank would work alongside existing European defence programmes and other proposed financing mechanisms. Supporters argue that these initiatives can work together, but the growing number of proposals could lead to competition for political support and government funding.
The bank is expected to remain open to additional countries that want to join. Its supporters hope the institution can become operational in 2027, although establishing a major international financial body requires agreements on governance, capital contributions, lending rules and oversight.
The latest commitment by nine countries is an important step towards turning the Canadian proposal into a working international institution. The coming months will show whether more major economies decide to join and whether the bank can become a powerful source of funding for defence and security projects around the world.