The European Commission has released the outcomes of its 2025 European Defence Fund (EDF) call, approving 57 joint research and development projects with total EU support of €1.07 billion ($1.26 billion). The allocation highlights the bloc’s strategic focus on drones, autonomous systems, and a deepening institutional link with Kyiv.
Of the total funding, €675 million ($796 million) is earmarked for 32 capability development efforts, while €332 million ($391 million) will back 25 research projects. Altogether, 634 organizations from 26 EU member states, along with Norway, are involved. Small and medium-sized enterprises account for more than 38% of participants and secure over 21% of the funding, according to the Commission’s summary.
A notable portion of the portfolio underscores a pivot toward modern warfare technologies. At least four programs—EURODAMM, LUMINA, SKYRAPTOR, and TALON—focus on loitering munitions and scalable, low-cost drone production. This emphasis reflects lessons drawn from the war in Ukraine, where inexpensive, disposable drones have significantly altered combat dynamics, exposing gaps in Europe’s defense manufacturing readiness.
Those battlefield insights are now being incorporated directly into EDF structures. For the first time, Ukrainian organizations can take part as subcontractors and third-party beneficiaries, a move that advances the integration of Ukraine’s defense industry into the broader European framework. Brussels and Kyiv are expected to finalize an association agreement soon, paving the way for Ukraine to participate on equal footing with EU member states.
Driving this integration is the EU Defence Innovation Office in Kyiv, created under the 2024 European Defence Industrial Strategy. One key initiative, STRATUS, aims to develop an AI-enabled cyber defense system for drone swarms and includes a Ukrainian subcontractor—an approach the Commission says injects real-world combat experience into EU-funded innovation.
More than 15 of the selected projects align with the Commission’s European Readiness Flagships, priority areas identified to strengthen near-term operational capabilities. Among them, Project AETHER will work on propulsion and thermal management technologies to support the Drone Defence Initiative.
To broaden participation, several drone-focused projects will open sub-calls aimed at startups and SMEs, including those from Ukraine. These smaller players can receive grants of up to €60,000 to contribute innovations to larger consortia. While modest in size, these grants are designed to lower entry barriers and expand the defense industrial base beyond established prime contractors.
The 2025 EDF awards are distinct from the €1 billion ($1.18 billion) 2026 EDF Work Programme adopted last December and the €1.5 billion ($1.77 billion) European Defence Industry Programme approved in March. Together, these funding streams illustrate how EU defense investment has rapidly grown in both scope and ambition since Russia’s full-scale invasion of Ukraine—while increasingly embedding Kyiv into Europe’s long-term defense strategy.
