Romania secures regional role in new international defence financing bank

  Romania has joined the founding group behind the Defence, Security and Resilience Bank, a Canada-led multilateral financial institution designed to mobilise public and private capital for defence, security and resilience projects. The joint declaration was signed on the sidelines of the NATO Summit in Ankara, where Canada and eight partner countries, Albania, Belgium, Greece, Latvia, Luxembourg, Romania, Turkey and Ukraine, announced their intention to establish the DSRB. The bank is expected to become operational as early as 2027.   Bucharest will host the DSRB regional office for the southern flank, following negotiations among the founding states, according to Romania’s Finance Ministry. Romania has been involved in the project from its early stages, contributing to the institutional architecture and governance model of the new bank, the ministry said. President Nicusor Dan said Romania’s participation as a founding member reaffirmed the country’s commitment to developing the new cooperation instrument. He said the bank would help member states finance investments in defence and security by expanding access to capital, reducing financing costs and supporting the development of industrial capabilities, with a particular focus on small and medium-sized enterprises.   The DSRB is intended to complement existing national and multilateral financing mechanisms, rather than duplicate them. Its purpose is to help member states finance defence and security capabilities, support industrial capacity and accelerate investments in areas such as critical infrastructure, energy, digitalization, cybersecurity, emerging technologies and supply chains relevant to defence and resilience.   Reuters reported that the bank aims to raise up to GBP 100 billion in low-cost financing for defence projects and plans to provide loan guarantees to private banks supporting defence companies. The DSRB is also aiming for a triple-A credit rating, which would allow it to offer cheaper financing to governments and companies that currently face higher borrowing costs.   The initiative comes as NATO allies are increasing defence spending and seeking to expand industrial capacity amid the war in Ukraine, rising tensions with Russia and broader geopolitical uncertainty. Reuters notes that the project was first proposed in 2024 by former NATO security advisers, senior former military officials and bankers, and is now being promoted by Canada.   For Romania, the Finance Ministry says the bank could open new financing opportunities for strategic projects and Romanian companies, particularly SMEs active in the defence industry and adjacent sectors. Depending on the financial instruments developed by the bank, companies could access loans, guarantees and equity investments aimed at expanding production capacity, supporting innovation, developing emerging technologies and integrating into international supply chains. “Romania is not entering this project as a simple participant, but as a founding state that has contributed to the construction of the new institution from the beginning. Romania’s security and allied security can no longer be viewed only through the lens of military planning; they need predictable financing, intelligently mobilised capital, strategic infrastructure and an industry capable of delivering,” said Finance Minister Alexandru Nazare.   He added that collective defence requires collective capital and that the DSRB could provide a new source of financing for Romanian strategic projects and companies in high-value sectors, including defence, critical infrastructure, energy, cybersecurity and emerging technologies.   “The fact that Bucharest will host the bank’s regional office represents a recognition of Romania’s role at the Black Sea and on the Eastern Flank and, at the same time, a concrete opportunity to transform this strategic positioning into projects, investments and economic development,” Nazare said.   According to its initiators, the DSRB is designed to address three main challenges: providing governments with long-term, lower-cost capital; supporting faster and more effective defence procurement; and mobilising private capital through guarantees that enable commercial banks to finance defence and security companies across the supply chain.   The founding states said the bank should begin operations as soon as possible in 2027, subject to the domestic ratification process in participating countries.