The commentary reviews the results of the European Defence Fund's 2023 invitations, compares the involvement of three Baltic States companies and research institutions in defence projects, and provides recommendations for changes to the status quo.
The results of the 2023 European Defence Fund (EDF) calls were announced last month. A total of 236 applications were submitted to the European Commission (EC), of which 54 were selected. The EC will allocate more than €1 billion to finance the projects. The program has been operating since 2021, so one can observe certain trends on a national and regional scale and assess what changes should be made to increase the involvement of Lithuanian participants in EDF-financed projects.
Five Lithuanian companies won EDF invitations
In 2023 calls, the Baltic Advanced Technologies Institute (BPTI) and international partners won four projects. In the E-CUAS project (total project value - €71.2 million), which will be coordinated by the Italian arms manufacturer Leonardo, BPTI will contribute to developing a standard EU anti-drone system. In the CARMENTA PF project (€55.5 million, coordinated by the Italian company Elettronica), BPTI will create a new generation air defence system together with consortium partners. In the MARTE project (€20.2 million, coordinated by the German association Marte Arge), BPTI will develop a modern tank platform together with partners. In the EqualMCM project (€68.8 million, coordinated by the Belgian Naval Group company), BPTI will contribute to developing intelligent anti-mine platforms.
Elsis Pro and its partners will participate in the FIRES 2 project (€32.2 million, coordinated by the French company Nexter Munitions), aiming to improve the properties of 155 mm artillery shells and rocket systems.
Altechna Sensing and consortium partners will develop a European 100kW class laser in the TALOS-2 project (€25.3 million, coordinated by the French company CILAS).
Eksma Optics and Lidaris will participate in the project LACE (€3.9 million, coordinated by the Italian National Research Service). This project, with partners, will develop next-generation lasers for military and civilian markets.
Next to the national EDF veterans, who have successfully participated in continuous projects with EU partners, we can notice new companies—Altechna Sensing, Eksma Optics, and Lidaris—that won calls for change technologies. It is good that Lithuanian laser companies have opened the doors of EDF more widely, so participation in the mentioned projects will benefit all companies in terms of both competencies and new B2B connections.
How did the Latvians do?
Five Latvian participants will jointly participate in four projects. The Belss company will participate in the EqualMCM project, and Tilde in the LINGUARISE-DC project (€5.9 million, coordinated by the Greek Satways company), aiming to adapt language processing modules for defence purposes. The University of Latvia, together with Riga Stradin University, will participate in the RESILIENCE-R project (€25.2 million, coordinated by the French Atomic Energy and Alternative Energy Commission) in which the consortium will develop new medical measures against chemical, biological, radiological and nuclear weapons. The Latvian company Photonic and its partners will participate in the BODYGUARD project (€6.4 million, coordinated by the French company Agenium Space) to develop satellite monitoring and warning systems.
How about Estonia?
For the third year, Estonian representatives are the most active participants in the EDF and have won the most invitations from the Baltic states, including 2023, where eleven Estonian companies will participate in nine projects. It should be mentioned that two projects are coordinated by the Estonian companies, KrattWorks and Sihtasutus CR14. KrattWorks (as coordinator), together with KappaZeta and international partners, will participate in the BadB project (€6 million), which will aim to develop navigation solutions for air and ground platforms in the absence of a GPS signal. Marduk Technologies will participate in the ongoing E-CUAS project. Sihtasutus CR14 (as coordinator), along with the Sorainen law office and other consortium partners, will participate in the AIDA project (€32.4 million) to develop artificial intelligence tools for managing cyber defence processes.
The Estonian company Cybernetica will participate in the ECYSAP EYE project (€37.4 million, coordinated by the Spanish company Indra Sistemas), in which it will develop a European cyberspace situational awareness platform with consortium partners. Cafa Tech, Osauhing Rantelon, and Wayren will participate in the MARTE project with international partners.
Cafa Tech will also participate in the EISNET (€41.6 million, coordinated by the French company Thales) and CALIPSO (€24.9 million, coordinated by the Greek research centre Demokritos) projects. The first will combine various types of sensors and effectors, and the second will create less polluting engines for marine and land military equipment. Wayren will also participate in the SWARM-C3 project (€3.9 million, coordinated by the Finnish VTT research centre), which will develop new control solutions for drone swarms.
The Estonian company Defsecintel Solutions, together with Skudo, will participate in the HSM4COM project (€3 million, coordinated by the Greek company Miltech Hellas) in which, together with the partners of the consortium, they will improve the security of data transmission in small satellites and drones.
A recipe for success or what should be done differently
The EDF receives an ever-increasing number of participants, so competition and the need to provide higher-quality proposals, which independent EU experts evaluate, are growing. Estonia's example shows that cooperation between national companies is increasing, thus attracting the necessary competencies within the country—even half of the winning Estonian proposals involve at least two national companies. Estonia also stands out for its desire to coordinate projects, which allows you to gain valuable experience working with international partners.
A significant part of EDF projects becomes continuous, e.g. projects started as scientific research works in 2021-2023, and from 2023, moving to the next stage of experimental development. Therefore, it is recommended that future participants join large consortia planning to submit applications to carry out scientific research work because it is likely that after a few years, the consortium will submit an ongoing application for financing experimental development.
Considering that EDF fully finances scientific research work, it would make sense for national ministries of defence to provide conditions for all those who wish to participate in this competition without setting additional national requirements. If co-financing from the national budget was necessary for the winners of the EDF call, it would be appropriate to introduce national priorities.
It is hoped that national participants planning to accept EDF invitations will actively participate in the information days organized by the National Ministries of Defence, where they can learn more about EDF processes and find national partners. The EDF 2024 call for applications will be published soon, so participants can apply until December 5.
The recent example of Ireland illustrates that the EU states have a pragmatic approach to the EDF and seek that national participants not only develop competencies in the field of defence technology but also return through this program a proportional part of the funds that the state contributed to the general EU budget with other hands. As no public data is available on the amounts receivable by national participants from the EDF, it isn't easy to assess the effectiveness of current engagement. It is hoped that state institutions will monitor this indicator, and measures will be foreseen to encourage greater involvement of national participants in the EDF.
From the perspective of a small country, more intense participation in the EDF is beneficial not only because of the financial component but also because of the unique opportunity to increase the competencies of the participants, expand international cooperation, conduct meaningful research in the context of defence technologies, or reorient production. Participation in the EDF will make it possible to produce more in-demand and technologically superior weapons systems, fully equip national Armed Forces with them, ensure the security of supply chains and export them to other countries, thus generating income for the national budget. All this will undoubtedly contribute to a better deterrent effect of a potential aggressor.
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