The government is launching a range of new measures and pledging NOK 967 million to strengthen Norway’s defence industry. Of this, NOK 342 million is earmarked for small and medium-sized Norwegian companies.
On 10th October, their Defence Minister Bjørn Arild Gram and Trade Minister Cecilie Myrseth launched the government’s new roadmap for the Defence Industry, featuring measures aimed at strengthening Norway’s defence sector.
The roadmap includes a number of well-considered and relevant proposals that could significantly contribute to increasing production capacity and strengthening Norway’s defence industry, provided they are implemented swiftly. The description of the current situation is thorough, providing a clear picture of the challenges facing the defence sector.
The roadmap addresses 4 main challenges:
Access to capital,
Regulatory challenges,
Potentially vulnerable supply chains,
Long-term access to expertise.
Through various initiatives, the government will support the defence industry with up to NOK 967 million to help increase production capacity. Of this, NOK 342 million is earmarked for small and medium-sized Norwegian companies. These measures will be financed through the Nansen programme.
The government plans to fund 4 initiatives with a total of close to NOK 1 billion:
- Small and medium-sized Norwegian companies supplying Ukrainian forces
- A new production line for rocket motors
- Expansion of Norwegian production of hexamine for explosives
- A feasibility study for a new explosives production facility
This is a strong start towards accelerating efforts to boost production capacity.
In addition, the roadmap outlines a number of other measures:
The simplifications and adjustments to the procurement processes for defence materials, which the government is now proposing, are something the industry has long requested. The roadmap underscores that in the enduringly altered security situation Norway faces, it is important to leverage the flexibility of defence procurement regulations to facilitate this. In this context, it is also crucial that the government, when necessary to safeguard key national security interests, applies the exemption clauses in the EEA Agreement to ensure national supply security and preparedness. This could include direct procurement from national suppliers or requirements for industrial cooperation agreements with foreign suppliers. This is something we expect the government to prioritise in its ongoing efforts to revise the procurement regulations for the defence sector and in drafting the new law on defence and security procurement, as these are essential prerequisites for securing long-term strategic agreements, investing in production capacity, and ensuring industrial preparedness to support defence operations in crises and wartime.
The government also confirms that it will use industrial cooperation agreements to maintain and strengthen capacity in the Norwegian defence industry. This will become even more important in the coming years, as Norway embarks on major procurements from abroad, such as frigates, long-range precision-guided weapons, long-range drones, helicopters, and the equipping of new brigades. It will be essential to establish clear strategies early on regarding the defence industrial benefits Norway should gain from these procurements, giving both suppliers and authorities in supplier countries sufficient time to identify opportunities and negotiate binding industrial cooperation agreements that ensure the contents of these agreements contribute to achieving the goals of the roadmap and the broader defence industrial strategy. The procurement of new frigates for the Royal Norwegian Navy is one project where it is urgent to develop a national industrial strategy in order to have a solid industrial plan within the outlined timeline.
It is very positive that the government is planning for Norwegian participation in the European Defence Industry Programme (EDIP), expected to begin in 2026.
Norway’s recent experiences with EU defence programmes, such as the EDF and ASAP, have been positive. These programmes provide funding, position the Norwegian defence industry within consortia with European partners, and secure market access in Europe.
Another promising initiative is the proposal to establish a grant-based scheme to support increased production capacity in the defence industry. This has been highly requested, especially by smaller companies in the supply chain. There is little point in investing billions in increasing production capacity at large companies if there isn’t a corresponding scaling up in the supply chain. Many smaller companies in the supply chain could become bottlenecks when production ramps up. Some of these companies lack the financial strength to make the necessary investments without risk-reducing measures. A grant-based scheme that mitigates the risks when demand increases faster than these companies can meet with self-financed investments is therefore essential. It is crucial that this scheme is implemented quickly. The linkage to EDIP is less practical, as this is a programme not yet adopted by the EU and is unlikely to have a significant impact until closer to 2030.
The government also announces a substantial focus on research and development.
This is crucial, both for industrialising new technologies and for keeping existing platforms and weapons systems operationally relevant as technological advancements accelerate and the performance and limitations of equipment are exposed in conflicts, such as the war in Ukraine. As with procurement, it will be crucial to simplify and accelerate processes, ensuring that successful concept development and experimentation projects that result in solutions meeting operational needs can quickly be industrialised and delivered to end users.
The roadmap is a solid foundation for strengthening the defence industry and collaboration between the defence sector and industry. It contains many measures that the industry has long called for and creates expectations within the industry that these measures will be swiftly implemented, producing the desired effects within the companies.
For more information Forsvars- og sikkerhetsindustriens forening
