Funding opportunities for the defence sector

In light of the changing international political framework, the defence industry in Europe is gaining increasing importance. Also, Austria’s Industrial Strategy published in January 2026 recognises the promotion of the Austrian defence and security sector as a growth opportunity. Targeted support for technological developments, innovation projects and cross-industry initiatives is therefore becoming increasingly relevant. This applies not only at national level, where Austria provides specific funding instruments for companies and research institutions in the defence sector, but also at EU level.

Below, we summarise the key funding opportunities, with particular focus on the newly launched calls of the European Defence Fund (EDF).

I. What instruments are available at EU level?

At EU level, a specific instrument is available: the European Defence Fund (EDF). The goal of the EDF is to better coordinate investments in European defence technologies and capabilities and to reduce fragmentation. It aims to promote the competitiveness, efficiency, innovation capacity and technological independence of the EU defence industry as well as European cross-border cooperation. Since coming into force, the EDF has become one of the world’s leading investment instruments for research and development in the defence sector.

Within the current work programme, the EDF currently offers new funding opportunities.

What topics are funded?

The current EDF work programme 2026 includes a budget of approximately EUR 1 billion and covers a total of 31 call topics (ranging from cybersecurity to energy resilience, environmental transition, underwater warfare, air and missile defence) and is managed through multiple calls. The focus is on projects by larger industry players; however, there is also room for SME projects.

The funded activities are grouped into two main categories:

• Research Actions (with a budget of approximately EUR 330 million) encompass collaborative research to make defence research spending in the EU as efficient as possible. The funding rate for such projects is 100%.
• Development Actions (with a budget of approximately EUR 676 million) relate to the development of defence products and technologies. Depending on the specific activity, the funding rate varies between 20% and 90% of the eligible costs with additional bonuses of up to 35%. It is possible to reach a funding rate of up to 100% through co-financing (usually by the member states).

Eligible costs include, among others, personnel costs, material costs and subcontracting expenses.

Who can submit an application?

For most call topics, only consortia consisting of at least three independent legal entities from three different countries (EU Member States and Norway) can submit applications. It is important to note that, in principle, no third-country control over the consortium members is permitted.

How can applications be submitted?

Grant applications may be submitted via the Funding & Tenders Portal of the European Commission between 22 January 2026 and 29 September 2026. While this is a direct EU funding source, due to the sector’s particularities, in Austria, submission of letters of intent from the Austrian Federal Ministry of Defence may be required. Funding decisions are expected by the end of May 2027.

II. What kind of grants are available at Austrian level?

Defence sector projects implemented in Austrian – i.e. not as part of an international consortium – can be financed through numerous other specific Austrian funding sources. The table below summarises the key parameters of the open calls for proposals.