National Defence Fund launched to grow Luxembourg innovation
Luxembourg has launched a National Defence Fund to support innovative companies developing advanced technologies for defence, security and dual-use markets.
Ministry of the Economy
05/05/2026
Minister of Finance, Gilles Roth, Minister of Defence, Yuriko Backes, and Minister for the Economy, SMEs, Energy and Tourism, Lex Delles, today unveiled the new National Defence Fund (FND), designed to support startups, scale-ps and innovative companies operating in the defence and dual-use sectors.
This new financial instrument, implemented by the Société nationale de crédit et d'investissement (SNCI), is fully in line with Luxembourg’s Defence Industry Strategy. It aims to help foster the development of a high-performing and innovative national ecosystem in this strategic sector.
A fund of €150 million over five years
The FND is structured as a trust agreement between the State of the Grand Duchy of Luxembourg and the Luxembourg Intergenerational Sovereign Fund (FSIL), acting as settlors, and the SNCI, acting as trustee. In practical terms, the State and the FSIL entrust their FND contributions to the SNCI, which manages them within a clearly defined framework. The State and the FSIL are thus jointly contributing €75 million. Through its governance, the SNCI will invest its own €75 million via co-investment, alongside the investments made on behalf of the trustors under the trust agreement.
The investment policy will target key sectors defined in the defence strategy, such as cybersecurity, space, advanced materials and automation.
The Fund will consider both investment fund proposals and proposals from companies seeking co-investment with eligible funds, in line with its mandate to promote the creation of economic substance in Luxembourg.
Three complementary strategic objectives
The Fund pursues three complementary objectives:
- to strengthen the creation of economic value in Luxembourg, in particular through innovation and the development of ecosystems
- to contribute to the country’s commitments regarding defence and security spending, in line with NATO objectives
- and to ensure the economic return on the investments made
Investment decisions for both trustees will be taken by an investment committee, ensuring clear governance aligned with strategic priorities. The Fund will also be able to draw on the long-standing cooperation between SNCI and the European Investment Fund (EIF).
A new mechanism within a broader ecosystem
The Fund aims to strengthen Luxembourg-based investment capabilities, support domestic businesses and attract new activities. It will contribute to the creation of sustainable economic substance, notably through the creation of skilled jobs, particularly in research and development. Collaboration with ecosystem stakeholders will be strengthened, as will international partnerships, in order to support the sector’s growth.
Role of SNCI
Under the trust agreement, SNCI will be responsible for the operational management of the Fund. Its duties include preparing, recommending and executing the investments decided upon by the Investment Committee, as well as the associated tasks (portfolio monitoring, reporting and administrative, accounting, cash management and compliance functions). In its capacity as trustee, the SNCI will set up a dedicated email address (info@fnd.lu) for all enquiries and requests for information regarding the terms and conditions.
With the National Defence Fund, Luxembourg is equipping itself with a modern and responsible instrument, capable of reconciling sovereignty, innovation and financial rigour. By mobilising public capital, we are supporting strategic technologies with high potential, whilst sustainably strengthening the country’s economic base."
Gilles Roth, Minister for Finance
He adds: "This initiative illustrates our commitment to investing in a targeted manner in Luxembourg’s security, competitiveness and industrial future, within a clear and rigorous governance framework.”
Future conflicts will require cutting-edge technological responses. Innovation in the defence sector is a cornerstone of our security, whilst generating lasting economic benefits, skilled jobs and technological excellence for the benefit of Luxembourg. It is a clearly stated political priority."
Yuriko Backes, Minister for Defence
The National Defence Fund is a strategic lever for strengthening our economic fabric and positioning Luxembourg as a key player in innovation in critical sectors."
Lex Delles, Minister for the Economy, SMEs, Energy and Tourism
He concludes: "Through this initiative, we are continuing a process already underway to make defence and dual-use technologies a priority area for economic development, with the ambition of positioning Luxembourg as a true hub of innovation, by supporting the development of innovative projects and facilitating the integration of our companies into European value chains."
