Lisbon, Dec. 4, 2025 (Lusa) - The defence minister has announced that Portugal's application for EU Security and Defence Industrial Development programme (SAFE) loans includes the acquisition of frigates, the refurbishment of the Alfeite Arsenal, and the production of armoured vehicles, ammunition, satellites, and drones in Portugal.
"We are going to invest in frigates, field artillery, satellites, medium combat vehicles, static vehicles, ammunition, anti-aircraft systems and drones, with Portugal leading the SAFE project in the case of drones," said Nuno Melo at a press conference held at the National Defence Institute (IDN) in Lisbon on Wednesday evening.
On the 28th November, the Cabinet approved Portugal's formal application to the European defence loan programme SAFE, worth €5.8 billion.
After the initial application, "a process is now open for contracting until the end of February, when the European Commission will confirm in concrete terms everything that will happen," explained Nuno Melo.
Even so, the Portuguese Government's priorities are already set: the executive wants these substantial investments to translate into the construction of new infrastructure, equipment and staff training at the Alfeite Arsenal, on the south bank of the river Tagus in the Lisbon area, in order to bring it "up to the requirements of the Navy and also to the requirements of the 21st century".
Nuno Melo said that Portugal wants to have an "industrial unit for the production and maintenance of armoured vehicles", which will serve not only national vehicles but also those from other countries, in addition to the installation of a small-calibre ammunition factory, which had already been announced, since this production "is deficient in the European Union".
"We will also have satellite production in Portugal, reinforcing Portugal's role in space," added Melo.
As part of these investments, Portugal will develop partnerships with Italy, France, Finland, Germany, Spain and Belgium.
Nuno Melo did not yet detail the number of pieces of equipment or which companies they will be purchased from, but when asked which investment will have the greatest impact, he stated that "the largest programme will be related to the Navy", at a time when two companies, France's Naval Group and Italy's Fincantieri, are competing for the sale of two to three frigates to the Portuguese State.
The minister said it was an "opportunity that had to be taken and not left".
"We are talking about a programme that establishes a 10-year grace period, with negotiations between states, using the European Union budget without the need for additional disbursements from member states, and without the need to pay VAT, which are extremely favourable conditions that would certainly not have been possible in the past," he said.
When asked about interest rates, Melo simply said that they would be detailed later, "when the contractual process is defined, which has not yet been completed".
Melo said he was not an expert in the choice of equipment, which is why he was advised by a technical team composed of members of the Armed Forces General Staff, the three branches of the Armed Forces, the Directorates-General for Armament and National Defence Assets and National Defence Policy, the General Secretariat for Defence and IdD Portugal Defence.
The selection criteria were the Portuguese Force System, NATO's new "demanding" capability targets, the Military Programming Law in force, and the military and civil support missions to which Portugal is bound.
Within the targets set by NATO, Nuno Melo emphasised "anti-submarine and surface oceanic capability", the need to complete "the building of a medium brigade, which is 16 years behind schedule, and to develop the building of the light brigade".
As for the Military Programming Law, Nuno Melo said he had taken into account the investments already contained in this organic law, last revised by parliament in 2023, which establishes the investments to be made by 2034.
This is an organic law that requires an absolute majority of MPs in office to be approved and whose revision has already been announced by the Government but has not yet taken place.
Melo said he was complying with the Military Programming Law, but "going beyond" it, considering that it is “outdated”. The minister stressed that if the government had not gone ahead with the application for SAFE loans because it had not revised the Military Programming Law, it would have "missed the opportunity".
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