ASAP program: EUR 2 billion for European industry for ammunition production

On Friday, March 15th, the European Commission (EC) allocated 2 billion EUR (8.61 billion PLN, 2.18 billion USD) in the EU’s Act in Support of Ammunition Production (ASAP) program, so that by the end of 2025, the annual production within the EU would reach 2 million artillery shells. Among the beneficiaries is Dezamet Metal Works from Nowa Dęba, a part of the Polish Armaments Group (PGZ).

Photo And Images: EC

On December 13, 2023, the application period for the ASAP program ended. Polish companies that submitted applications were Dezamet Metal Works from Nowa Dęba, Mesko from Skarżysko-Kamienna, and Chemical Plants Nitro-Chem from Bydgoszcz. Ultimately, the first of these will receive €2,137,612.06 (8.61 million PLN, 2.18 million USD) to increase their capacity for artillery shell production.

The European Commission took a record time to select 31 projects in the field of explosive materials, propellants, powder, artillery ammunition, rocket projectiles, and testing. The projects, totaling €513 million (2.209 billion PLN, 558 million USD), will be funded by EU and Norwegian budgets. This funding will stimulate additional industry investments through co-financing, resulting in a total investment amount in the supply chain of approximately €1.4 billion (6.03 billion PLN, 1.52 billion USD).

The ASAP program will focus on supporting the production of propellants/powder and explosives, which are bottlenecks in the production of ammunition, with the European Commission allocating approximately three-quarters of the program’s value to them. The program will support projects aimed at increasing annual production capacities by over 10,000 tons of propellants/powder and over 4,300 tons of explosives. To achieve this, the EU will invest €248 million (1.067 billion PLN, 270 million USD) and €124 million (533.9 million PLN, 135 million USD) respectively in the production capacities of these components.

Thanks to the actions already undertaken, the prospective European annual production capacity of 155 mm artillery ammunition reached 1 million units per year in January.

Enterprises receiving funding from the ASAP program and their supply chains are dispersed throughout the European Union. Support is provided to strengthen existing production capacities as well as to build new ones. Completed projects will enhance the response capability and potential of the EU defense industry, ensuring faster delivery of ammunition and rocket projectiles in Europe.

It is expected that funding agreements with selected applicants will be signed in May 2024.

Projects and companies along with the allocated funding amounts:

UPDATE

On Monday, March 18, Polish Armaments Group (PGZ) published a statement on the distribution of EU funds under the ASAP program:

Companies from the ammunition domain of Polish Armaments Group submitted applications for the ASAP program in the total amount of EUR 11 million. The aim of the EU program is to deliver more missiles to Ukraine and replenish stocks in member states.

The amount of the requested subsidy resulted from the need to ensure co-financing of the investment from own funds. One of the three applications, for the amount of EUR 2.1 million, was approved by the EU qualification committee, thanks to which Poland received 20% of the total amount it applied for. The funds will be allocated largely to the automation of production processes at Dezamet S.A. In accordance with EU requirements, the applications were submitted in secret and therefore it is not possible to disclose their detailed provisions.

The ASAP program is one of the available sources of financing for a rapid increase in ammunition production capacity, from which PGZ companies apply for funds. The main source of financing for the expansion of the production potential of the PGZ ammunition domain remains the government program of the National Ammunition Reserve worth PLN 2 billion. PGZ companies are waiting for the release of the first tranche of these funds.