The State Department on Monday said that U.S. has agreed to provide Poland $2 billion in direct loans to help the NATO ally purchase new defense items to continue to modernize its military forces.
The Foreign Military Financing (FMF) direct loan is backed by a $60 million subsidy in additional financing to give Poland the best financial terms possible.
Poland has been a key supplier of arms for Ukraine in that country’s war against Russian invaders and has already embarked on a modernization program that will make it a crucial partner for NATO in Central Europe. In the past year, the U.S. has already agreed to sell Poland billions of dollars’ worth of M1 Abrams tanks, AH-64 Apache attack helicopters, HIMARS launchers and related munitions, Patriot launch stations and missile interceptors, the Lower Tier Air and Missile Defense Sensor, and the Integrated Air and Missile Defense Battle Command System.
“Poland plans to significantly expand the Polish Armed Forces; has divested its legacy Russian origin military equipment in favor of an ambitious multi-year, multi-billion-dollar defense modernization program; has concluded an enhanced defense cooperation agreement with the United States; hosts Allied and U.S. forces, including the U.S.-led NATO Battlegroup and U.S. V Corps Headquarters (Forward); and actively participates in NATO missions across the region,” the State Department said.
The FMF direct loans are like FMF grants in that they provide recipients the means to purchase U.S. training and equipment that meet the security goals of the U.S. and its partners, a department spokesperson said.
The last time the U.S. used FMF loans was for Iraq in fiscal years 2016 and 2017. These loans provided $3.4 billion for Iraq to make Foreign Military Sales purchases using the borrowed funds and repay with interest over time.