Portugal seeks to participate in EU's SAFE defence funding mechanism

Portugal hopes to use SAFE funding to expand its fleet of 139 VAMTAC ST5 tactical vehicles. (Victor Barreira)

The Portuguese Ministry of National Defence (MND) on 29 July formally expressed interest in joining SAFE (Security Action for Europe), the European Commission's (EC's) financial instrument intended to help European Union (EU) member states increase their investment in common defence procurement and strengthen the European defence industrial base (DIB).

SAFE is part of the EC's Readiness 2030 plan, presented in March 2025, to ramp up defence investment, and will provide up to EUR150 billion (USD171 billion) in long-maturity loans raised on capital markets and backed by the EU budget for EU countries that ask for financial assistance for “urgent and large-scale procurement efforts”, according to the EC.

Portugal was one of 18 EU member states that expressed interest in obtaining loans through the SAFE mechanism, totalling at least EUR127 billion in potential defence procurements, Andrius Kubilius, commissioner for defence and space, said in an EC statement on 30 July.

The financial assistance takes the form of loans with terms of up to 45 years, grace periods of up to 10 years, the possibility of pre-financing of up to 15%, and value-added tax (VAT) exemption on concluded contracts, the MND said on 29 July.

The Portuguese government created a SAFE Working Group to establish the technical development of its projects and prepare a formal request for financial assistance by 30 November, according to the MND.

This request will be accompanied by a detailed investment plan for the European DIB, with a special focus on integrating the Portuguese DIB into future value chains promoted by projects financed through the SAFE instrument, the MND added.