France to increase export financing for mid-sized defence firms

Bpifrance, the French public investment bank, plans to raise the export financing limit for small and medium-sized defence companies, citing a gap in current funding availability. At present, Bpifrance can finance export deals up to €25 million (US$27 million) when acting as the sole lender, but it aims to increase this amount to approximately €40 million by 2025.

Hugues Latourrette, the head of Bpifrance’s export-finance department, shared this goal during an interview at the Euronaval event near Paris, explaining that while the financing limits affect only a few companies at the moment, the growing dynamics of the industry could lead to greater demand, Caliber.Az reports per foreign media.

Bpifrance plays a crucial role in filling a financing gap, as many large commercial banks are reluctant to provide financing for smaller defence exporters, particularly for deals below €40 million. Latourrette, however, chose not to disclose specific details about the companies currently seeking export financing, citing confidentiality.

The competitive nature of global defence markets, with key manufacturers from countries such as Türkiye, South Korea, and Israel, poses a challenge to French defence firms. Latourrette emphasized that a strong commercial and technical proposal alone is often insufficient to secure export deals. Financial support, such as that provided by Bpifrance, is a crucial element in clinching contracts.

France ranks as the second-largest global arms exporter, accounting for 11 per cent of worldwide arms exports between 2019 and 2023, according to the Stockholm International Peace Research Institute. The country has approximately 4,000 small and medium-sized defence firms. Bpifrance is also active in helping French defence exporters secure contracts, including in Africa and Europe. Notably, the bank only offers financing in euros and avoids transactions in US dollars to avoid extraterritorial legal issues.

By Vafa Guliyeva