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Estonia will use part of a new European Union loan to arm Ukraine with drones, drawing on a loan worth up to €2.34 billion, according to ERR. The loan will also rebuild its own air defense and ammunition stocks, and all of it must be spent by 2030.

As Moscow continues its all-out war in Ukraine, the EU's northeast is rearming fast, bracing for a Russia that regional military chiefs expect to be combat-ready again within two years.

What the loan buys

Estonia signed the financing deal with the European Commission under SAFE (Security Action for Europe), a €150 billion EU program that raises money jointly on the markets and lends it to member states on cheap terms to fast-track defense spending, its finance ministry said.

A share of Estonia's up-to-€2.34 billion will go to Ukraine as drones. The rest strengthens air defense, buys military vehicles, and refills artillery shells and other ammunition. The credit runs 45 years, and every purchase and delivery must be finished by 2030. Estonia filed its final application in November 2025.

Why the loan helps

Borrowing through SAFE lets Estonia raise money on better terms than it could alone, because the EU issues debt at lower rates. The bloc raises the money jointly and splits it among members. Estonia will hold defense spending above 5% of GDP, and the loan eases the strain that puts on its budget.

Estonia, a NATO and EU state of about 1.3 million people, shares a 294-kilometer border with Russia and treats Moscow's war on Ukraine as a direct threat to its own security. It has studied that war closely for years and is now racing to rebuild its air defenses and ammunition stocks.

Kadri Peters, a deputy secretary general at Estonia's Defense Ministry, said the fast-changing security situation in Europe demands stronger, quicker defense from the whole alliance. She said large-scale purchases ahead will directly affect Estonia's security and the wider region.

In July, Estonia and the United States agreed to resume weapons deliveries in the coming months, after a pause tied to the war in Iran, with long-range ATACMS ballistic missiles the exception. In May, Washington had warned European allies of long delays as it drained its own stocks, mainly of HIMARS rocket ammunition and NASAMS air-defense missiles. The same shortages hit Ukraine the hardest: it currently struggles to shoot down Russian ballistic missiles for lack of US-made PAC-3 interceptors.

Estonia has been backing Kyiv since the beginning of Russia's full-scale invasion in 2022. It co-leads an IT coalition that has funneled over €1.4 billion into Ukraine's drone programs, and has moved to tap Kyiv's battlefield-tested drone technology for its own forces.