Christodoulides voices support for defence industry transformation

President Nikos Christodoulides has announced six measures with the strategic aim of transforming Cyprus' defence industry to enable it to contribute significantly to Europe's collective security framework.

Defence tech has in recent years moved to the main stage at tech conferences and investor meet-ups with European VCs showing new interest in defence or dual-use technologies — those that can be used for both civilian and military purposes.

It is worth noting that the European Investment Bank (EIB) Group contributes to Europe's peace and security through the reinforcement of Europe's security and defence capabilities.

As noted on the EIB's website, "We facilitate access to finance for European businesses and innovators with projects that protect our citizens. From reconnaissance and surveillance, spectrum protection and control, to cybersecurity solutions, infrastructure and military mobility, our financing solutions are designed to bolster projects that keep Europe safe, resilient and innovative."

The EU also operates the Defence Equity Facility, the European Investment Fund (EIF) which invests, as a Limited Partner, in private funds (venture capital or private equity funds) with investment strategies targeting European companies developing innovative defence technologies with dual-use potential.

Showing Cyprus' support, in his address at the recent second International Conference on Defence and Security ("Battlefield Redefined 2024") in Nicosia Christodoulides said, among other things, that the wars and conflicts in Ukraine and the Middle East region "serve as a reminder that vigilance and the advancement of defense capabilities are indispensable for the preservation of peace and stability", adding that Cyprus, especially due to the invasion and ongoing occupation by Turkey, profoundly appreciates the critical role of the defense industry in safeguarding stability, addressing hybrid threats, and bolstering our nation’s role within regional and European security frameworks.

He furthermore added that “it is for this reason, but also having in mind Cyprus’ membership to the EU and the fact that we are located in a region of great geopolitical importance and uncertainty, that investment in this sector is not just a duty but a strategic imperative.”

To this end, President Christodoulides announced six measures to further support and strengthen Cyprus' defence industry.

The first measure, he said, is the preparation of the legislation to institutionalize the high-tech defense industry aiming to strengthen national defense and stimulate economic growth.

The second measure, President Christodoulides stated, is the institutionalization of Industrial Collaboration Defense Programs, announcing that for the first time since the establishment of the Republic of Cyprus, the Government, through the Ministry of Defence, has officially requested the French Ministry of Defence to involve the Cypriot defence industry in future defence contracts with French companies.

The third measure, he said, is the establishment of the Defense Research, Technology, and Industry Council to act as an advisory body to the Presidency.

He added that the fourth measure concerns the establishment of the National Registry of Defense Industry Manufacturers in collaboration with the Cyprus Chamber of Commerce and Industry (KEBE).

President Christodoulides noted that the fifth measure concerns the “increase of the funding allocated for Defense Research and Development to support the Ministry’s Research and Development programs and to further promote the participation of our industry into European defense programs.”

Finally, the sixth measure, he said, concerns the funding from the government of the Republic of Cyprus for National Pavilions at major international defense exhibitions annually, in order to bolster the international presence of the Cypriot defense industry.

In his speech, President Christodoulides also said that “over the last five years, the Cyprus defense industry has demonstrated extraordinary growth and resilience, emerging as a key pillar of our national strategy".

He also mentioned that 16 Cypriot companies, with the support of the Ministry of Defence, have secured participation in 37 different contracts of the European Defense Industrial Development Program as well as of the European Defense Fund. Contracts, he said, with a total budget of approximately €435 million.

He added that “my vision, our vision, is to transform Cyprus from a consumer of defense products into a producer that actively contributes to shaping the European defense landscape through innovation, the development of cutting-edge technologies, and the production of high-quality defense systems.”