(L-R) Yuriko Backes, Luxembourg's Minister of Defence; Lex Delles, Luxembourg's Minister of the Economy, SMEs, Energy and Tourism; Gilles Roth, Luxembourg's Minister of Finance; Credit: MFIN

On Thursday 30 April 2026, Luxembourg's Ministry of Finance, the Directorate of Defence, the Ministry of the Economy and the National Credit and Investment Institution (SNCI) announced the launch of the National Defence Fund (Fonds National de Défense - FND), a new instrument aimed at developing a national ecosystem of innovative defence companies.

Luxembourg's Minister of Finance, Gilles Roth, the Minister of Defence, Yuriko Backes, and the Minister of the Economy, SMEs, Energy and Tourism, Lex Delles, presented the FND, which is designed to support startups, scale-ups and innovative companies active in the defence and dual-use sectors.

This new financial instrument, implemented by the SNCI, is aligned with Luxembourg's defence industry strategy, according to the authorities. It aims to contribute to the development of a high-performing and innovative national ecosystem in this strategic field.

A €150 million fund over five years

The FND is structured as a fiduciary arrangement between the State of the Grand Duchy of Luxembourg and the Luxembourg Intergenerational Sovereign Wealth Fund (FSIL), acting as fiduciaries, and the SNCI acting as a fiduciary capacity. The State and the FSIL entrust their contributions to the SNCI, which manages them within a clearly defined framework. Together, the State and the FSIL contribute €75 million. The SNCI will invest, through its governance structure, an additional €75 million co-investment capital, alongside the investments made on behalf of the fiduciaries under the 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 applications from both investment funds and companies co-investing with eligible funds, under its mandate to foster the creation of Luxembourg's economic substance.

The FND pursues three complementary objectives:

  • strengthening the creation of economic substance in Luxembourg, particularly through innovation and ecosystem development;
  • contributing to national defence and security spending commitments, in line with NATO objectives;
  • ensuring the economic viability of investments.

Investment decisions will be made by an investment committee for both fidcuiaries, ensuring clear governance aligned with strategic priorities. The fund will also build on the long-standing cooperation between the SNCI and the European Investment Fund (EIF).

The FND aims to strengthen Luxembourg-based investment capacity, support national companies and attract new business activity. It is expected to contribute to the creation of sustainable economic substance, particularly through the creation of skilled jobs in research and development. Collaboration with ecosystem stakeholders will be strengthened, as will international partnerships, to support the sector's growth.

Under the fiduciary agreement, the SNCI will ensure operational management of the fund, including preparation, recommendation and execution of investments decided by the investment committee, as well as related tasks (portfolio monitoring, reporting, administrative, accounting, treasury management, compliance).

The SNCI will establish a dedicated email address (info@fnd.lu) for all inquiries and requests for information regarding the procedures.

Finance Minister Gilles Roth stated: "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, while sustainably strengthening the country's economic base. This initiative illustrates our commitment to targeted investment in Luxembourg's security, competitiveness and industrial future, within a clear and demanding governance framework."

Defence Minister Yuriko Backes added: "Future conflicts demand cutting-edge technological responses. Innovation in the defence sector is a key pillar of our security, while also generating lasting economic benefits, skilled jobs and technological excellence for Luxembourg. It is a clearly stated political priority."

Economy Minister Lex Delles explained: "The National Defence Fund is a strategic lever for strengthening our economic fabric and position Luxembourg as a key player in innovation in critical areas. Through this initiative, we are continuing an existing momentum aimed at making defence and dual-use technologies a priority for economic development, with the ambition of positioning Luxembourg as a true innovation hub, by supporting the development of innovative projects and facilitating the integration of our companies into European value chains."