Nordic traders drive funding in area’s defence sector

The dramatic improve within the defence budgets of North Atlantic Treaty Group (Nato)-aligned Nordic international locations in 2026 is primed to ship important development alternatives for corporations creating cyber safety, battle theatre communications methods and drone countermeasures know-how

Particularly, Nordic state-run businesses such because the Nordic Funding Financial institution (NIB) are providing so-called “favoured mortgage financing” to corporations creating superior applied sciences with dual-purpose purposes within the civilian market and navy area.  

The Nordic states, based mostly on budgets offered to their nationwide parliaments in October, will spend a complete of €50bn on defence and safety in 2026.

The extent of spend is nearly 30% larger than what the 4 Nato-aligned nations spent in 2020, and is ready to be dwarfed additional when the projected whole capital outlay by the Nordic international locations on defence rises above €70bn.  

In its 2026 finances, Norway has pledged to take a position a further €51bn on defence throughout the interval between 2025 and 2036.

In Sweden, the 2026 finances invoice features a plan to determine a Defence Innovation Unit to develop analysis infrastructure and develop groundbreaking defence and safety applied sciences in partnership with the personal defence trade. 

Curiosity grows

Nordic corporations working within the particular areas of cyber safety, satellite-based intelligence gathering, digital warfare and next-technology 6G communication connectivity applied sciences are seeing a heightened degree of curiosity from a brand new breed of traders within the form of pension funds and bank-run defence trade funding programmes. 

The most important of those defence and safety funds have been launched throughout the second half of 2025 by finance teams Nordea, Danske Financial institution, Svenska Handelsbanken and the Nordic Funding Financial institution (NIB).  

Pension funds are becoming a member of forces with the banking sector to drive public-private funding and financing cooperation to satisfy the Nordic area’s elevated defence strengthening wants.  

This improvement is occurring in opposition to the backdrop of Russia’s invasion of Ukraine in February 2022, an occasion that brought on navy impartial and unaligned Finland and Sweden to affix Nato within the face of the improved danger of geopolitical instability arising from the battle and impacting the Excessive North and Baltic Sea-rim international locations  

The elevated curiosity by pension and funding funds is monitoring the deliberate and important will increase in nationwide defence spending by Nordic governments. This pattern is predicted to speed up gross sales and development, particularly, within the area’s “pure defence” small and medium-sized enterprises (SMEs), in addition to corporations engaged within the manufacture and provide of dual-purpose merchandise that concentrate on civilian and navy markets.   

Additional proof of the dual-use dividend for SMEs emerged in September, when the NIB, a multilateral monetary establishment owned by the governments of Sweden, Norway, Denmark, Finland, Iceland, Estonia, Latvia and Lithuania, entered a €400m uncommitted credit score facility with Lithuania to spice up the Baltic state’s nationwide defence system throughout 2025 to 2027.

Bolstering defence capabilities

The NIB’s 20-year financing deal is earmarked for superior know-how and dual-purpose defence supplies procurement to bolster Lithuania’s nationwide safety infrastructure and fortify the nation’s defence capabilities.  

The capital investments arising from the credit score facility can be used to buy a spread of defence merchandise and experience, together with IT, counter-drone methods and cyber safety enhancement providers, mentioned André Küüsvek, the NIB’s CEO. 

“Improved safety is crucial for nationwide sovereignty and paramount for financial improvement,” he added. “Lithuania will use this credit score facility to finance tasks wanted for long-term defence resilience.”  

The NIB’s rising status as a state-backed lender to the SME sector was highlighted by its five-year €5m funding mortgage to Finland-headquartered Savox Communications. The funding mortgage can be used to finance Savox’s analysis and improvement (R&D) tasks within the areas of wi-fi communication and built-in knowledge providers.  

Savox is amongst a rising variety of Nordic SMEs which are altering their enterprise fashions to embrace dual-purpose product improvement and manufacturing to develop gross sales to each the civilian and defence-security markets.  

The NIB mortgage will allow Savox to develop navy purposes for its modular communication and battle theatre situational consciousness methods, mentioned Jerry Kettunen, Savox’s chief government 

“Entry to NIB funding means we will speed up the event of next-generation knowledge options for the defence sector,” he mentioned. “It’s important that NIB has recognized the defence sector as a strategic space of focus. This help contributes to the internationalisation of each Finnish and Nordic defence industries, and reinforces the defence capabilities of our area.”

Slush it up

Underlying the rising position of SMEs as suppliers of defence-application applied sciences, this yr’s annual Slush Startup occasion in Helsinki will function a collection of dual-use, defence and safety occasions that carry corporations within the area along with angel traders, personal fairness teams, enterprise capitalists, and executives from the state navy and personal defence trade.  

Slush Startup, which can run from November 15–20, has positioned itself as the most important Nordic defence sector “matchmaking” pitch occasion in 2025 for startups working within the safety sphere.  

The elevated presence of Nordic governments in private-public defence know-how partnerships was manifest when Finland’s Ministry of Defence collaborated with Nordic telecoms Telia and Nokia to conduct the world’s first standalone 5G slice handover between a number of international locations in a reside community.  

The groundbreaking trial demonstrated the potential of 5G to supply mission-critical capabilities for defence and different key nationwide safety areas by offering seamless cross-borders 5G slice continuity, mentioned Jarmo Vähätiitto, the top of the Finnish defence command’s command, management, computer systems, communications and cyber defence unit.  

“The trial was an necessary milestone to showcase the dual-use prospects of 5G for defence whereas advancing communication capabilities throughout the Nato area,” he mentioned. “We’re actually open to different alternatives to associate with Nokia and Telia to discover additional prospects for integrating 5G into our defence and safety operations.” 

The core 5G check was run throughout a joint Nordic navy train, and concerned sustaining a steady and safe knowledge connection within the slice whereas shifting throughout a number of Telia-operated networks in three international locations.  

Nordic pension funds are well-positioned to considerably improve investments in main defence teams and dual-purpose SMEs in 2026 and 2027. Particularly, Danish pension funds led by AkademikerPension and PFA have already doubled their capital investments in defence and safety corporations since June 2024.

Direct investments by pension funds in state-owned defence infrastructure was boosted in August, when Insurance coverage and Pension Denmark (IPD) and banking affiliation Finance Denmark (Finans Danmark) collaborated to roll out the Monetary Protection and Preparedness Partnership (FDPP), an funding car meant to supply extra outlined frameworks and improved coordination across the defence trade’s future financing wants.  

The FDPP partnership will allow Denmark’s banking and insurance coverage sectors to higher mobilise extra personal sources to help nationwide defence and safety by way of investments and financing to advance new-generation cyber safety, anti-drone and sensor applied sciences, mentioned Ole Krogh Petersen, CEO of IPD and chair of pension insurance coverage group PFA.

“The brand new safety image we’re experiencing requires new options – and nearer cooperation between the private and non-private sectors,” he mentioned. “The FDPP will assist to evaluate how we within the monetary sector can finest contribute in relation to the federal government’s priorities – together with Denmark’s upcoming defence industrial technique and the institution of a nationwide defence fund.”

Denmark’s finance sector can be supporting Interforce – an organisation established below the Danish Defence Command (DDC) to develop areas of collaboration with enterprise and trade in Denmark. Over 1,400 Danish corporations had joined as members of Interforce as of the tip of September.

Below the DDC-run scheme, staff of personal enterprises obtain further holidays with pay in the event that they volunteer to function reservists within the Danish Defence Forces, the Danish Residence Guard or the Danish Emergency Administration Company. 

Defence and safety funds launched by Nordic banks and pension funds since July 2025 comprise Nordea’s Empower Europe Fund, Svenska Enskilda Banken’s (SEB’s) European Defence and Safety Fund and Danske Financial institution’s Danske Make investments Defence and Safety Fund. All three funds will goal investments in corporations to construct strengthened Nordic and European defence infrastructure, safety and resilience methods. 

“Our thematic fund permits us to satisfy shopper demand whereas contributing to the event of a stronger and safer Europe,” mentioned Javiera Ragnartz, head of SEB asset administration, which is managing the Empower Europe Fund.