EIB and Santander Unlock €300 Million for SMEs in European Security and Defence

The European Investment Bank (EIB) and Santander have signed a guarantee agreement in Madrid to mobilise approximately €300 million in new financing for SMEs and mid-cap companies operating in the European security and defence supply chain, according to an EIB press release.

This initiative marks the second collaboration between Santander and the EIB in the security and defence sector. Both institutions aim to address the persistent financing barriers that smaller companies face, a problem which has gained urgency amid rising geopolitical tensions. The agreement is designed to improve access to credit for firms that are critical to the region’s security infrastructure but often lack sufficient financial support from traditional lenders.

The EIB stated that the move is crucial for enhancing the competitiveness and resilience of SMEs and mid-caps, which play a key role in fostering innovation and technological development across Europe’s industrial base. These businesses are considered essential to the EU’s drive for strategic autonomy in defence and security, especially as the bloc navigates a period of geopolitical uncertainty.

The agreement forms part of a wider EIB Group commitment to the sector, with €4 billion invested in security and defence in 2025 and an expected €5 billion in 2026. For Spain alone, €500 million was allocated to the sector in 2025. The pan-European intermediated financing instrument supporting these initiatives has a €3 billion lending envelope.

According to Gemma Feliciani, Director of Financial Institutions at the EIB, the partnership with Santander will help ensure that vital supply chain participants have the resources needed to innovate and remain resilient against external shocks. Borja Oyarzabal, Global Head of Commercial Banking at Santander, and Alexandra Borisova, Global Head of Private Debt Mobilization at Santander Corporate & Commercial Banking, also underscored the importance of supporting SMEs in sectors critical to Europe’s security ambitions.

While the financing is expected to strengthen the EU's security and defence ecosystem, the EIB cautioned that some barriers to credit may persist for certain SMEs and mid-caps. Ongoing geopolitical risks could also impact sector stability.

Nevertheless, the initiative offers significant opportunities for the development of next-generation technologies and the reinforcement of Europe’s industrial leadership. The move is seen as a concrete step towards a more robust, innovative, and autonomous European defence sector.