Navigating Bank Financing for Lithuania’s Defense Industry

The Lithuanian defense sector is striving to strengthen national security, but access to bank financing and services remains a challenge – primarily due to ESG considerations in financing policies.

Banks’ ESG frameworks often exclude defense sector clients, even when fully compliant with national and international regulations. While European and Nordic development banks have adapted (EIB, NIB), commercial banks frequently treat defense projects as high-risk.

Banks operating in Lithuania and others remain cautious, citing risk factors associated with arms and dual-use goods. Even infrastructure lending to military installations undergoes extensive scrutiny, delaying account openings and financing approval.

Robert Juodka, Managing Partner at NOEWE LEGAL Law Firm and board member of the Lithuanian Defense & Security Industry Association, commented:

“Banks are conducting duplicate checks that public authorities already perform – supplying military-relevant equipment should not trigger disproportionate delays. We’ve seen account openings stretch to 1.5–2 months, and funders drawing red lines out of caution rather than real risk.”

He urges a simplified, trust-based declaration system, similar to tax filings, and better inter-agency coordination across defense, interior, and economic ministries.

NOEWE LEGAL Defence & Security practice team is here to support defense contractors by:

• navigating complex ESG-finance dynamics,
• advising on regulatory compliance with national and EU standards,
• providing practical strategies for sped-up onboarding and access to credit.

Read the whole article in Lithuanian by Business News (Verslo žinios) here.