Ukraine’s Government simplifies underground construction for defense industry enterprises
The Cabinet of Ministers of Ukraine has supported the Ministry of Defence’s initiative, which expands opportunities to attract private investment in underground production capacity and other infrastructure facilities for defense industry enterprises.
The adopted amendments to Government Resolution No. 1494 give private capital access to a simplified mechanism for building protected production facilities and obtaining the necessary permits.
russia is trying to destroy our defense production. In response, we must make Ukraine’s defense industry more resilient. To do this, it is important to relocate production to protected sites and preserve our manufacturers’ unique capabilities. That is why we are now proposing a more flexible mechanism to attract additional resources to such projects.
Developers will be able to build protected facilities using their own or externally sourced funds and, once construction is complete, transfer them to defense industry enterprises for ownership, lease, or use.
Private investment in protected defense production
The construction timeline, the terms of use of the facility, and the procedure for transferring it will be set out in an agreement between the investor and the defense industry enterprise.
If only part of a completed facility is transferred to a defense enterprise, that part must account for at least 25% of the total area and be suitable for housing, relocating, or expanding production capacity.
Ukrainian defense companies must not only scale up production but also protect their production capacity from enemy attacks. To this end, we are giving private capital the opportunity to invest in building underground infrastructure. Companies will receive protected production space, investors will gain a new area for investment, and the state will gain additional capabilities for the uninterrupted production of weapons and military equipment without placing an additional burden on the budget.
The mechanism can be used both to create new protected capacity and to relocate or expand existing production.
Who can use the underground construction mechanism
To participate in the mechanism, developers will need to conclude agreements, including with Defence City residents, contractors under state contracts, and enterprises designated by the Ministry of Defence as critically important in the defense industry sector.
The adopted amendments will make it possible to attract non-budgetary funds to build protected defense infrastructure, create and scale up production capacity faster, and simplify the relocation of defense industry enterprises.
