EU member states have agreed to establish a €150 billion (nearly $170 billion) Defense Industrial Readiness Loan Instrument (Security Action for Europe — SAFE) to boost the bloc’s defence sector, with Ukraine formally recognised as a partner country, Ukrainian Prime Minister Denys Shmyhal has said.

In a statement on X on Wednesday, Shmyhal said the decision would help integrate Ukraine into the EU’s joint defence procurement efforts and open opportunities for Ukrainian firms within European supply chains.

He described the initiative as “important and urgent” for bolstering the security of both EU member states and Ukraine.

“We are stronger together,” Shmyhal said, thanking European Commission President Ursula von der Leyen, as well as Poland and other EU partners for their continued support.

SAFE is expected to channel significant loans to strengthen industrial capacity across the EU in response to rising geopolitical tensions and growing security demands on the continent.

The European Commission has not yet publicly commented on the timeline for the instrument’s implementation.