Lithuania submitted the first payment request of EUR 1.06 billion to the European Commission under SAFE instrument
The Ministry of Finance has submitted the first payment request, amounting to EUR 1.06 billion, to the European Commission (EC) under the SAFE (“Security Action for Europe”) instrument. These funds are allocated for combat systems and other equipment acquired by Lithuania.
"By submitting the first payment request, we are taking another significant step toward strengthening Lithuania’s defence capabilities. SAFE provides an opportunity to finance major investments in national security on highly favourable terms, while simultaneously reducing the borrowing costs of the State. Being among the first countries to sign SAFE agreements, Lithuania effectively uses the instruments developed by the European Commission to strengthen the security of our country and of Europe as a whole," Minister of Finance Taurimas Valys says.
The payment request amounts to EUR 1.06 billion. From this amount, the European Commission (EC) will deduct the 15% pre-financing payment received in June; consequently, the amount transferred to Lithuania will be slightly lower— EUR 905 million. Once the EC approves this request, Lithuania will have received a total of EUR 1.86 billion, representing 29% of the EUR 6.375 billion loan allocated to the country. The funds under this first payment request are expected to reach Lithuania in approximately two months.
Lithuania received a pre-financing payment of EUR 956 million on 24 June. All subsequent payments are made based on the achievement of specific milestones (such as the announcement of public procurement, the signing of a contract, the payment of an advance to a manufacturer, the receipt of a portion of the equipment, the payment of the final balance, the receipt of all equipment, etc.); the Ministry of Finance prepares payment requests upon receiving information from the Ministry of National Defence (MoND).
SAFE concessional loans are intended to strengthen national resilience and defence. The MoND is allocating these funds to equip the Land Forces division with combat, support, and logistical systems, as well as essential ammunition stocks; to provide counter-mobility measures and mines for the Baltic Defence Line; and to support the maintenance and development of other Lithuanian Armed Forces capabilities. It is estimated that the SAFE instrument will help meet approximately half of the requirements for developing the national division.
The SAFE loan to Lithuania is important not only for defence investments, but also for extremely favourable financing conditions. The duration of the loan is as long as 45 years, and the interest rate is the same as the one borrowed by the EC itself. In addition, the SAFE loan is subject to a 10-year deferral, which means that Lithuania will first pay only interest and only after 10 years will start repaying the loan.
SAFE is a temporary instrument for EC defence-enhanced loans that will run until the end of 2030. The total volume of SAFE is EUR 150 billion. The instrument enables EU Member States to conduct joint defence procurement in priority areas ranging from ammunition and ground capabilities to air defence, maritime capabilities, cyber, space technologies and artificial intelligence.
Additional information:
The SAFE loan serves as an alternative source of financing, enabling the implementation of investments already included in the budget under more favourable terms and allowing for the optimization of debt-servicing costs. It facilitates the diversification of borrowing sources and leverages the highly favourable borrowing terms offered by the European Commission (EC), thereby reducing overall long-term financing costs.
It is important to note that the disbursement of the loan and the procurement activities carried out by the MoND are not directly linked in terms of timing. Funds received under the SAFE loan contribute to the overall borrowing requirements of the Ministry of Finance, while the MoND conducts its procurement using the approved State budget appropriations. An additional requirement applies only when seeking a loan disbursement: information regarding the fulfilment of agreed-upon milestones must be submitted to the EC.
Last updated: 21-10-2026
Related news:
Moody’s Investment Service assessed Lithuania‘s economic outlook