Portugal is set to invest in frigates, artillery, satellites, combat vehicles, static vehicles, ammunition, anti-aircraft systems, and drones, according to Nuno Melo during a press conference at the National Defense Institute in Lisbon. He specified that the SAFE drone project is led by Portugal.
On the 28th, the Council of Ministers passed Portugal’s formal application to the European Union’s SAFE defense loan program, valued at 5.8 billion euros. Following this application, a contracting process begins, running until the end of February, when the European Commission will provide concrete details, Melo explained.
The Portuguese government has already outlined its priorities, emphasizing large-scale investments aimed at developing new infrastructure, equipment, and personnel training at the Arsenal do Alfeite to meet the Navy’s and 21st-century demands.
Nuno Melo revealed Portugal’s plans to establish an industrial unit for the production and maintenance of armored vehicles, serving both national and foreign needs, and the already announced small-caliber ammunition factory to address a production deficit in the European Union.
“We will also produce satellites in Portugal, enhancing the country’s role in space,” Melo added.
In these initiatives, Portugal plans collaborations with Italy, France, Finland, Germany, Spain, and Belgium.
Though details on equipment numbers or supplier companies remain undisclosed, Melo noted the Navy-related program would require the largest investment. The French Naval Group and Italian Fincantieri are vying to supply two to three frigates to the Portuguese state.
Melo noted this is “an opportunity that either needed to be seized or missed.” He explained the program includes a 10-year grace period, involves state-to-state negotiations utilizing the EU budget without additional financial commitments from member states, and excludes VAT payments, shaping a significantly advantageous arrangement not attainable in the past.
Regarding interest rates, Melo indicated they would be detailed later, “once the contractual process is defined,” which is still ongoing.
Melo, not a specialist in equipment selection, relied on advice from a technical team comprising members from various Defense Forces branches, national armament and defense property directors-general, the National Defense Policy, and IdD Portugal Defence.
The selection criteria revolved around the Portuguese Forces System, NATO’s demanding capacity targets, the Military Programming Law, and Portugal’s military and civil support missions.
Addressing NATO’s targets, Melo highlighted the “anti-submarine and ocean surface capabilities,” and the need to complete “the development of a medium brigade, delayed by 16 years, and the construction of a light brigade.”
Regarding the Military Programming Law, Melo considered existing investments described in the recently revised organic law, approved by Parliament in 2023, outlining commitments through 2034.
The law, requiring an absolute majority of legislators for approval, is pending revision, as announced by the government. Melo confirmed compliance with the law but stated he was “going beyond” it, noting it as “dated.” He stressed the urgency of participating in SAFE loans, asserting the government would have lost this “opportunity” had it not proceeded due to the unrevised law.
