Investing in Ukraine's defense industry — reducing risks
Investments in Ukraine's defense industry are entering a new stage — joint production with EU partners is moving to serial manufacturing thanks to localization and clear mechanisms for repeat orders. Trident Forward is helping streamline the process, from site selection to contract signing.
This was announced by Michael Druckman, founder and CEO of Trident Forward and member of the advisory board of the Ukraine Cities Partnership (UCP) program of the German Marshall Fund of the United States (GMF US), for a Novyny.LIVE's column.
Investments in Ukraine's defense industry
Ukraine is developing localized munitions and unmanned systems at a rapid pace. Euro-Atlantic partners are accelerating co-production through Danish, British, and French frameworks.
However, complex areas such as high-level air defense and engine subsystems still require more in-depth planning and access to technology.
At the same time, the overall dynamics are shifting towards "Make in Ukraine." One example is the joint production of large-caliber CSG shells with Ukrainian Armor in Ukraine.
Compatibility and testing in combat
In order to deliver the equipment to the troops as soon as possible, it is necessary to quickly confirm its compatibility and reliability.
Ukrainian developers have devised a cycle of "testing at the front and improving now". The key is to avoid wasting partners' time and to establish a clear, realistic path to validation.
This process now takes weeks instead of years because manufacturers of dual-use technologies collaborate with units on the front line to conduct combat testing and prepare for mass production.
Once the equipment has been tested in the field, the main objective is to transition from small batches to stable serial production. This is most effectively achieved through multi-year framework agreements and joint procurement involving institutions such as the IFU and the EDA.
The Danish Direct Acquisition Program and the Weapons of Victory initiative demonstrate how to incorporate proven solutions into planned delivery schedules. Trident Forward tracks real-world reorder patterns and identifies areas where manufacturers need support to qualify or scale up.
Financial risk coverage
In order to award and implement contracts, financial risk coverage must be provided. A combination of phased payments, sovereign guarantees (EIFO and UKEF) and war risk insurance from the EBRD and MIGA enables suppliers with budgets ranging from $5 to $50 million to operate with confidence. These mechanisms reduce capital at risk, simplify loan acquisition, and accelerate transaction finalization.
For investors, this creates a transparent system of accountability and a predictable process from contract to delivery.
Where to deploy capital
Priorities for the next two years:
- anti-drone systems;
- tactical UAVs;
- barrage munitions;
- production of 155-mm;
- depot-level service hubs.
Additionally, it is necessary to track indicators that confirm market maturity. These include the launch and implementation of the EU's Ukraine Support Instrument, the initiation of joint production projects in Ukraine, and the fulfillment of the EU's promise to provide two million artillery shells.
Market entry steps
- Identify a niche with confirmed combat demand and an existing procurement pool.
- Design localization with a European partner and access to testing infrastructure.
- Assemble a risk mitigation package: EIFO/UKEF for financing, EBRD/MIGA war-risk for transportation and assets.
- Build an export compliance loop: design without dependence on ITAR, transparent ownership structure, control audit.
- Outline the path from the minimum viable sample to repeat orders through framework agreements and pooled procurement with milestone KPIs.
- Establish production scaling and service hubs capable of performing depot-level service.
- Synchronize delivery schedules with EU priorities and communication with state and supranational players.
Read more:
Ukraine to open defense industry offices in Germany and Denmark
New war realities — how Ukraine is shaping global defense