Spending on armaments and military equipment will increase to a record UAH 739 billion this year. This was announced by Prime Minister Denys Shmyhal from the rostrum of the Verkhovna Rada during the Question Time for the Government.

“The Government will allocate almost UAH 55 billion to develop the capabilities of the defence industry alone. The plans of domestic defence companies provide for an increase in existing production capacities to USD 30 billion,” the Prime Minister said.

The Prime Minister outlined the Government’s priorities in the defence sector for this year:

• to launch long-term contracts with manufacturers for 3-5 years under the Weapons of Victory project;
• expand funding for Ukrainian long-range programmes;
• develop the “Danish model”, whereby partners buy weapons from the Ukrainian defence industry for the needs of the Ukrainian army. At least USD 1 billion in funding is expected to be raised for 2025;
• increase localisation and involvement of international defence companies in the production of weapons in Ukraine;
• strengthen the innovation component and support private manufacturers with grants for defence research and development.

In addition, according to Denys Shmyhal, despite 13 major attacks against the Ukrainian energy system last year, it is now operating stably and integrally.

“The increase in the possibility of importing electricity from the EU to 2.1 GW has had an important effect. This year, we have planned important measures to further expand the physical capacity of electricity imports,” the Head of Government noted.

According to the Prime Minister, two key tasks for this year are the restoration and protection of energy facilities. The Ukraine Energy Support Fund has already accumulated more than USD 1 billion.

“At the same time, we will continue to develop distributed generation. In 2024, ancillary services of generation facilities with a total capacity of about 600 MW were purchased at long-term special auctions. Almost 500 MW of them are services of new generation facilities that are to be commissioned by October this year,” said Denys Shmyhal.

The programme of support for small and medium-sized businesses, private households and condominiums to increase their energy autonomy is also ongoing. These include interest-free loans, the GreenDIM programme, the 5-7-9 programme, and programmes of the Decarbonisation Fund.

According to the Prime Minister, the state budget for 2025 also provides for the financing of 13 investment projects in the energy sector worth UAH 54 billion.

“An important element of energy sustainability is the functioning of the Ukrainian gas transmission system, which now operates in zero transit mode. We have not planned and do not plan to sign any contracts to continue the transit of russian gas,” said Denys Shmyhal.

He added that one of the priorities for this year would be to further increase gas production and invest in promising Ukrainian fields. According to him, gross gas production in 2024 increased by 2.2% compared to 2023, to more than 19 billion cubic metres.

The Prime Minister said that the Ministry of Energy and Naftogaz had been tasked with paying special attention to the development of the concept of Ukraine as “Europe’s gas safe”.