Norwegian Government earmarks NOK 967 million for boosting the defence industry

As part of the presentation, the Government disclosed that it would contribute NOK 967 million to new measures to increase the Norwegian defence industry’s production capacity.

The funding will go to support:

• Small and medium-sized Norwegian companies that supply Ukrainian forces
• A new rocket motor production line
• The development of hexamine production for explosives in Norway
• A feasibility study for a new explosives production facility

More on the new measures below.

A roadmap for increased production capacity

‘The security situation has created a significant and urgent need for defence materiel in Ukraine, among our allies, and domestically. The roadmap is a comprehensive plan to help increase production capacity in the Norwegian defence industry. With this, we are taking responsibility for contributing to meeting the needs of Ukraine, our nation, and our allies,’ says Minister of Defence Bjørn Arild Gram.

Following decades of peace and a decline in demand for its products, the defence industry’s production capacity in Norway and Europe has been diminished. Russia’s invasion of Ukraine requires us to reverse this trend.

‘Ukraine depends on access to air defence systems, missiles, artillery shells, and other defence materiel to continue its fight. Both our industry and government have done much to boost production in Norway, but this remains a complex and long-term challenge for all our allies. With this roadmap, we are taking responsibility for enhancing both Norwegian and allied capacity to support Ukraine in their resistance against aggression,’ says Mr Gram.

Since Russia’s invasion of Ukraine, the Norwegian Government has backed the Norwegian defence industry with billions of NOK in grants, agreements and investments (see sidebar).

‘This is the first time a Norwegian Government has announced a strategy to increase the production capacity of the defence industry. In addition to keeping Norway safe, several of the measures will help create new jobs and have a direct and positive business impact on the defence industry and its subcontractors throughout Norway,’ says Minister of Trade and Industry Cecilie Myrseth.

NOK 967 million earmarked new measures

The Government has decided to allocate up to NOK 967 million to back four new measures to augment production capacity.

‘We will increase our support for innovations in Norwegian defence companies developing materiel for use in Ukraine; we are backing Nammo’s ambition to establish a new production line for rocket motors; we are strengthening the Norwegian value chain for the production of explosives, and we are looking into the possibility of establishing a new facility for the production of military explosives in Norway,’ says the Minister of Defence.

The measures are funded through the Nansen programme.

NOK 342 million for small and medium-sized Norwegian businesses supplying cutting-edge technology to Ukraine

The Norwegian Government has decided to allocate a further NOK 342 million to enhance its support for Norwegian small and medium-sized companies. The programme, which is now being scaled up, is managed by the Norwegian Defence Research Establishment (FFI). Norwegian small businesses can apply for financial support to put innovative products that they believe could benefit Ukrainian forces into industrial production. Several companies have already been backed by the programme. With the scaling-up, it will be possible to back more projects and to industrially manufacture more cutting-edge technology.

Support for a new Nammo rocket motor production line

The Norwegian Government has decided to offer co-funding for a fourth rocket motor production line at Nammo in Raufoss. Most of the air defence missiles used by the Norwegian Armed Forces, and a large proportion of the missiles used to defend Ukraine, use rocket motors manufactured in Norway. The missiles are made in Germany or the USA, but the rocket motors are manufactured at Raufoss. Nammo currently has two production lines for rocket motors, and has received backing from the Norwegian Government and the EU to build a third rocket motor production line for air defence and other missiles. The objective of the new financial support offered is to put Nammo in a position to raise the remaining capital to build a fourth production line.

Support for Norwegian hexamine production for explosives

The Norwegian Government has decided to offer co-funding to develop the production of hexamine, an important ingredient for manufacturing advanced explosives. Norway is one of very few Western countries to produce advanced military explosives, which are used in much of the materiel Ukraine needs to defend itself against Russia, including artillery shells, anti-tank defences and rocket motors. The co-funding is intended to help leverage capital so that a subcontractor of Chemring Nobel can develop their own hexamine production capacity in Norway. This is an important step in securing the value chain for the production of explosives.

Feasibility study to assess establishment of a new explosives production facility with Chemring Nobel

Together with Chemring Nobel, the Government plans to look into the possibility of setting up a new production capacity for military explosives. To this end, the Government has decided to launch a feasibility study to examine all relevant factors and determine whether establishment of such a facility is viable. The Government will require such a facility to adhere to the environmental standards of the future. In addition to environmental aspects, the ability to recruit enough qualified staff and the facilitation of critical infrastructure locally, including sufficient power, are important factors.