1 Focus on increasing production capacity in the Norwegian defence industry
The Government will facilitate increased production capacity to enable the Norwegian industrial sector to meet Ukrainian, Allied and national needs. The Government aims to increase production in the Norwegian defence industry in order to prevent, as far as possible, any bottlenecks in the provision of Norwegian and Allied military support to Ukraine.
The Norwegian defence industry has already made significant investments in increasing production capacity. In addition, the Government has taken steps to mobilise further investments in Norwegian production capacity by accelerating the implementation of existing contracts and co-financing efforts to expand capacity in the industry. Financial support provided by the Government is intended to accelerate expansion efforts while triggering and reinforcing investments in defence production from the private sector.
This roadmap presents the Government’s comprehensive plan for developing and increasing production capacity in the Norwegian defence industry. The instruments outlined in the roadmap are focused on the areas that will have the greatest strategic military impact for Ukraine, Norway and relevant allies. Priority will be given to areas in which the Norwegian defence industry maintains a competitive advantage and has a critical role to play in supporting Ukrainian, Norwegian and Allied capabilities.
Priority areas identified by the Government are:
- NASAMS air defence systems, rocket motors and military high explosives;
- innovative technology that can lead to significant operational advantages;
- artillery ammunition and other defence-related production that will be of direct military value.
The measures set out in the roadmap also encompass the defence supply value chains for the various products. The small companies that produce key components and other inputs and the major producers that assemble weapons systems are both important in this context.
The measures set out in the roadmap build on the Norwegian National Defence Industrial Strategy, and are intended to facilitate the implementation of the Long-term Defence Plan 2025–2036 and significantly strengthen the Norwegian Armed Forces. The measures are to enhance Norwegian and Allied capacity to provide effective military support for Ukraine in its fight to defend itself against Russia’s war of aggression. The measures are also an important element in the joint Allied effort to boost production capacity in the European defence industry. The roadmap illustrates the Government’s solidarity with its allies, and its willingness to participate in burden-sharing and take responsibility for increasing national production in order to meet the needs of the Alliance. The needs of Norway, Ukraine and the Alliance are interconnected and, in many cases, overlap, and therefore have not been specifically prioritised in relation to one another.
Increasing production capacity in the defence industry will be capital intensive. The investment framework in the new Long-term Defence Plan is the Government’s key instrument for funding the increase in production capacity. In addition to the heightened demand for defence materiel as a result of the plan, further measures will be needed to accelerate the production of prioritised defence products and ensure adequate preparedness capacity. Industry-oriented funding instruments may be used to unlock financially sustainable investments. Targeted measures will be introduced to ensure preparedness capacity. The Government will also implement other measures to facilitate the increase in defence production capacity.
Time pressure is a particular challenge. Russia has transitioned to a war economy and significantly increased its production of military equipment. As a result of the current security situation, Ukraine, the Allies and Norway all have an urgent need for defence materiel. The increase in production capacity must therefore be achieved far more quickly than under normal circumstances. The various measures in the roadmap are intended to further advance the rapid and effective expansion of production capacity.
Facts: Financial support for increased production capacity since 2022
Since Russia’s full-scale invasion of Ukraine, the Government has provided funding to a number of projects to expand production capacity in the Norwegian and Ukrainian defence industries:
- An agreement with the Norwegian aerospace and defence company Nammo to provide NOK 1.95 billion for the production of artillery ammunition to meet Norway’s national needs. The procurement has an overall framework of approximately NOK 5.23 billion.
- A joint Scandinavian initiative under which Norway has signed an agreement with Nammo for the delivery of artillery ammunition to Ukraine. Norway will be providing NOK 200 million of the overall framework of approximately NOK 600 million.
- Norwegian participation in the EU Act in Support of Ammunition Production (ASAP) instrument, which was created to increase ammunition production. Norway’s financial contribution is approximately NOK 190 million.
- Co-financing of ASAP projects in Norwegian companies for a total of NOK 950 million. ASAP funding will trigger major investments in production capacity for ammunition, missiles and explosives.
- Roughly NOK 1 billion towards the establishment of a new production line for artillery ammunition and rocket motors at Nammo.
- Up to approximately NOK 940 million towards advance orders of long-lead items with a long production lead time in order to accelerate an upgrade of the NASAMS air defence system and further development of Norway’s national air defence structure.
- Funding to Nammo for the issuing of production licences for artillery ammunition to Ukrainian defence industry.