The State Department this week announced the U.S. has agreed to provide Poland another $2 billion in direct loans to help the NATO ally purchase new defense items to continue its military modernization.
The newly announced Foreign Military Financing (FMF) package follows a similar $2 billion direct loan to Poland the U.S. approved in late September 2023
(Defense Daily, Sept. 25, 2023).
“Foreign Military Financing direct loans are a security cooperation tool reserved for some of our most important security cooperation partners. Loan proceeds will further advance Poland’s military modernization effort across a wide range of capabilities, substantially contributing to strengthening the defense and deterrence of NATO’s Eastern Flank,” the State Department said in a statement on July 8.
Like the FMF package announced last fall, the newly approved direct loan includes an additional $60 million subsidy to assist Poland with the interest rate costs.
The State Department said the additional FMF add “will help accelerate Poland’s defense modernization by supporting urgent procurements of defense articles and services from the United States,” while the department did not specify the interest rate that will be applied to the loan.
FMF funds are grants provided to help partners and allies purchase U.S.-made defense equipment and training.
Poland is currently undertaking a major military modernization program, including purchases of U.S. defense equipment such as F-35 aircraft, Patriot missile systems and Abrams main battle tanks,” the State Department noted.