Germany is preparing €1.35 billion in additional military and energy support for Ukraine while expanding industrial cooperation on drone production, deepening Europe’s largest economy’s financial and defense commitment to Kyiv.
German Chancellor Friedrich Merz arrived in Kyiv Sunday accompanied by Economy Minister Katherina Reiche and executives from companies including Siemens Energy, Hensoldt, Diehl Defence and Quantum Systems.
German officials said the package includes €1 billion in military assistance and €350 million for repairs to Ukraine’s energy infrastructure.
The visit is also expected to advance agreements for joint German-Ukrainian production of drones and other defense systems.
A major focus is expected to be rapid production of interceptor drones designed to counter high-speed attack drones. German defense-technology company Quantum Systems and Ukrainian manufacturer WIY Drones have already established a joint venture to manufacture the Strila interceptor and related air-defense technology.
Germany and Ukraine are also expanding cooperation on longer-range weapons, including systems with ranges exceeding 1,000 kilometers.
The industrial component is economically significant because European governments are increasingly shifting defense expenditure from emergency weapons transfers toward longer-term manufacturing capacity.
Energy infrastructure represents the second major component of the package.
Repeated Russian attacks on Ukrainian electricity and other infrastructure have created continuing demand for generation equipment, grid repairs and replacement systems.
The presence of Siemens Energy and major German defense manufacturers in Merz’s delegation highlights the increasingly industrial character of European support for Ukraine.
For markets, the development reinforces two longer-term investment themes: structurally higher European defense expenditure and continuing capital requirements for Ukraine’s energy system and eventual reconstruction.
The immediate milestones will be the final terms of the German-Ukrainian production agreements and deployment of the newly announced military and energy funding.
