European Commission President Ursula von der Leyen announced a 6 billion euro ($7 bn) advance credit for Ukraine’s drone production, funded through profits from frozen Russian assets.

According to the European Parliament, Von der Leyen highlighted Ukraine’s success with drone warfare, saying that Ukrainian drone operations account for more than two-thirds of Russian equipment losses. “This is not just a battlefield advantage. This is a reminder of the power of human ingenuity in our open societies,” she said.

However, the Commission President warned that Russia is rapidly catching up with Iranian-developed Shahed-type drones and leveraging industrial mass production capabilities.

The EU leader emphasized the bloc’s potential to counter this threat through industrial capacity.

“We can help transform Ukrainian ingenuity into battlefield advantage – and into joint industrialization. That’s why I can also announce that Europe will advance 6 billion euros from the ERA credit and conclude a Drone Alliance with Ukraine,” von der Leyen declared.

She framed the initiative as addressing Ukraine’s scaling needs: “Ukraine has ingenuity. Now it needs scale. And together we can provide it: so that Ukraine maintains its advantage, and Europe strengthens its own.”

Von der Leyen also called for urgent development of new military financing solutions for Ukraine based on frozen Russian assets. In 2024, G7 agreed to provide Ukraine with a joint $50 billion loan backed by Russian assets, with funds formally issued as credit but repaid through revenues from frozen Russian assets. The European Union is set to transfer 18.1 billion euros ($21 bn) within this mechanism.

The Drone Alliance represents a shift from Ukraine’s initial drone warfare innovations to industrial-scale production, positioning European manufacturing capacity as a counterweight to Russia’s mass production advantages supported by Iranian technology transfers.