Financial institutions are showing growing interest in supporting Poland’s defence sector, driven by rapidly increasing military expenditure. According to representatives of KUKE, the industry’s long-term development will depend not only on access to financing and expanded production capacity, but also on increasing exports and diversifying customers. This would help reduce the risks associated with fluctuations in domestic demand.
“Demand for financing in the Polish defence sector has become a new area of focus for financial institutions. It is clearly coming from both companies operating in the industry and financial institutions — not only Polish ones, but institutions from around the world. Most of the weapons we purchase are financed by foreign commercial banks, with support provided by export credit agencies,” Janusz Władyczak, CEO of KUKE, told the Newseria news agency.
According to data from the Polish Bank Association, approximately 80% of the banking sector, measured by its share of total assets, is already involved in financing projects related to security and defence.
Nearly 70% of banks finance dual-use projects with both civilian and military applications. Around half participate in financing arms purchases, while more than 30% are involved in funding the development of new technologies.
Polish Defence Companies Still Focus Primarily on the Domestic Market
“When it comes to Polish companies’ interest in exports, it certainly exists, but it remains extremely limited. Most of the work is still ahead of us. We need to build this diversification pillar and stop selling exclusively to the Polish Armed Forces. Hopefully, this will happen,” Władyczak said.
“The risk is that we do not fully understand the depth of our domestic market. As a result, we do not know how far individual companies operating in the sector can expand their production capacity. If the products we manufacture are not dual-use and we do not export them, we remain dependent on a single customer.”
He stressed that exports can reduce the risks resulting from reliance on one buyer.
“This can be seen in several European countries. France, the United Kingdom, Sweden, Norway and Italy — and increasingly Germany — are investing heavily in the sector, but in a way that ensures at least one-third to one-half of their production is exported,” the KUKE chief executive said.
“In the event of a threat, they can redirect production from foreign customers to their domestic markets, secure the entire supply chain and deliver the equipment they need.”
Defence Industry Could Become a Driver of Poland’s Economy
The need to strengthen both state-owned and privately owned defence companies, improve sector integration and promote Polish military equipment abroad has also been emphasised by Poland’s Minister of National Defence, Władysław Kosiniak-Kamysz.
In his view, the defence industry could become one of the key drivers of Poland’s economic growth.
“Polish companies still do not have a natural appetite for expanding abroad when they can sell their products in Poland. This is related to their stage of development, including that of state-owned enterprises, where the majority of production is still intended for the domestic market,” Władyczak said.
“That appetite may emerge over time. However, we must realise that the opportunity to secure foreign markets exists here and now. In three or four years — and as citizens, we should hope this will be the case — the situation may be completely different and demand for weapons may no longer be as strong.”
“Companies from the countries we have mentioned are signing contracts every day. Nobody is going to wait several years for us to wake up.”
Global Arms Transfers Continue to Rise
According to the Stockholm International Peace Research Institute, the global volume of international arms transfers in 2021–2025 was 9.2% higher than during the previous five-year period.
Ukraine was the world’s largest arms recipient, accounting for 9.7% of total deliveries. The United States remained the largest arms supplier, with a global share of 42%.
US arms exports increased by 27% in 2021–2025 compared with the previous five-year period. Deliveries to Europe rose by 217%.
The United States was followed by France, with a 9.8% share of global exports, Russia with 6.8%, Germany with 5.7% and China with 5.6%.
Poland ranked 14th, accounting for approximately 1% of global arms exports. Polish exports increased by 4,387% in 2021–2025 compared with 2016–2020, mainly as a result of deliveries to Ukraine following Russia’s full-scale invasion.
Ukraine remains the largest recipient of Polish military equipment, accounting for 94% of Poland’s arms exports.
Export Growth Will Require Stronger Financial Support
Financial support will be crucial if Poland is to develop its defence exports further.
“We have one of the best systems for supporting trade, exports and business development in Europe, and also one of the strongest in the world. What is needed now is greater awareness among companies and investors of the instruments already available on the market, so they can use them and leverage additional financing,” the KUKE chief executive said.
“At the same time, KUKE is preparing to introduce a new range of instruments to the Polish market. These instruments are intended to protect Poland’s broadly understood national interests. We will also be able to finance projects undertaken by foreign investors in third countries.”
KUKE to Expand Support for Defence Investments
A proposed amendment to the KUKE Act would allow the institution to provide insurance not only for export financing and energy transition projects, but also for defence-related investments and the import of rare earth minerals and military equipment.
The draft legislation provides for insurance coverage for financing investments that expand Poland’s domestic defence industry. This could include manufacturers of dual-use products and start-ups developing technologies for the security and defence sectors.
Selected investments by foreign companies could also be covered if all or part of their production is intended to meet the needs of the Polish Armed Forces.
The new instruments could play an important role in increasing production capacity, attracting investment and helping Polish defence companies enter international markets. Without greater export diversification, however, the industry could remain vulnerable to changes in domestic procurement and fluctuations in government demand.
