US grants direct loan to Romania to modernise army, produce artillery ammo

The United States and Romania signed a $920 million direct Foreign Military Financing (FMF) loan agreement on Wednesday, with Romania to use the funds to modernise its armed forces and boost ammunition production.

At the signing ceremony in Bucharest, Prime Minister Marcel Ciolacu said the $920 million loan would be used to equip the military with advanced systems and strengthen Romania's domestic defence industry.

"In the coming period, we will focus on developing new production capacities in Romania, creating jobs for our citizens, and regaining relevance in regional military equipment manufacturing," said Ciocalu, adding that the loan marks the first step in future cooperation with the US.

"We will gain access to top-tier military equipment, enabling us to work alongside the U.S. and our NATO allies to bolster collective defence and deter threats to Romania and other nations on the Alliance’s eastern flank," Ciolacu added.

He also mentioned that Romania plans to propose additional strategic projects to the US, which are already being studied by the relevant ministries at an advanced stage. The aim is to secure up to $2 billion in financing through the same financial mechanism.

According to Economy Minister Radu Oprea, $220 million of the loan will be used to establish a centre of excellence for the production of large calibre ammunition (120-155 mm). He noted that this centre would position Romania as the only producer of Abrams tank ammunition in Europe, with plans to export throughout Europe and beyond.

The US government is providing up to $60 million in FMF grants to offset the cost of the loan, which, according to a statement from the US Embassy in Bucharest, "will help accelerate Romania’s comprehensive military modernization efforts, including the acquisition of American defence systems such as Abrams battle tanks and the co-production of ammunition”.

(Catalina Mihai | Euractiv.ro)