The United States will sign a $920 million direct loan agreement with Romania to support its defence modernisation programme, the Romanian government has announced.
The deal comes at a time when Romania is looking to increase its defence procurement plan following Russia's invasion of Ukraine.
Romania, which is a member of NATO and the European Union, aims to spend 2.5% of its GDP on defence.
Romania shares a 650-kilometre border with Ukraine and Russian drones have repeatedly entered its territory over the past year. Some areas are also close to Ukrainian ports on the Danube, which are frequently targeted by Russia.
Under the loan agreement, the Defense Ministry will have direct access to $700 million, and up to $220 million will be directed to the state-owned ROMARM company, which controls 15 companies that produce weapons and munitions ranging from gunpowder to guided missiles.
The loan, granted by the United States through the Foreign Military Sales (FMS) facility, has a 12-year repayment plan, Romanian media reported.
In August, the Romanian government authorized the country to use a total of $4 billion in direct loan agreements through FMS, as well as up to $8 billion from financial markets with guarantees from the U.S. government. | BGNES
