NATO Turns to Private Funding for Defence

Ankara (ANTARA) - NATO launched a new initiative on Tuesday aimed at channeling private capital into its defence and security sectors, as the alliance seeks to complement strained national budgets with commercial funding amidst increasing US pressure for member states to raise defence spending targets.

The initiative, named ‘Call to Action’, was announced during NATO’s first Defence Industry Forum at the NATO Summit in Ankara.

The initiative urges commercial financial institutions to increase lending and equity investments in military production and security.

Speaking at the forum, NATO Secretary General Mark Rutte stated that the demand for military capabilities continues to rise. According to him, the alliance requires more capital to scale up the defence industry and fund innovation.

Rutte noted that although private funding for the sector is increasing, the amount remains far from adequate.

This push reflects NATO’s broader effort to shift more of the financial burden of military production onto commercial markets through joint public-private investment models, he added.

Under the initiative, NATO allies are expected to facilitate domestic financing mechanisms to support this transition. Major Western financial institutions, including Barclays, Citi, and Deutsche Bank, are participating in the framework.

NATO revealed that the relevant financial institutions have mobilised $217 billion (1 USD = IDR 17,988) for investments related to the security sector.

The drive to increase private sector funding comes as NATO seeks to rebuild its military stockpiles and boost weapons production amidst growing pressure from the US, which wants member states to raise defence spending targets from 2 per cent to 5 per cent of Gross Domestic Product (GDP).

Amidst the budget constraints faced by European nations, NATO is increasingly relying on commercial markets to fund its military expansion.