Ukraine to boost naval capabilities with UK loan

Harry Lye 9 October 2020 (Last Updated October 9th, 2020 15:46)

The UK is set to loan Ukraine £1.25bn to boost its naval capabilities under a deal that could see British shipyards construct new missile-equipped craft for the Eastern European nation.

Ukraine to boost naval capabilities with UK loan
Ben Wallace MP, Secretary of State for Defence (left), talking with the Ukrainian President Volodymyr Zelensky (centre-right) onboard HMS Prince of Wales. Image: MOD/ Crown Copyright.

Ukraine’s president Volodymyr Zelenskiy has been in the UK for a visit this week, where he toured the UK’s newest aircraft carrier HMS Prince of Wales and visited Downing Street.

On Wednesday, Zelenskiy told Ukrainian media that a memorandum of intent for the loan and subsequent ships would be signed during the visit. The UK has yet to confirm whether the money will be spent on warships.

A UK Government spokesperson told Naval Technology: “Ukraine and the UK have a long-standing history of defence co-operation and we look forward to building on that relationship.

“As part of the UK government’s ambition to boost trade globally, UK Export Finance (UKEF) has increased its country cover limit for Ukraine by £1.25bn. This is available for all sectors, not just defence, and is not a commitment of any funds to a particular project.”

Under the deal Ukraine is likely to purchase eight Barzan-class fast attack craft, a ship design originally built in the UK for Qatar in the 1990s. At the times the ships were built by Vosper Thornycroft; the company’s shipbuilding wing was later acquired by BAE Systems, giving it ownership of the vessels design.

During a visit to Portsmouth, representatives from the UK’s defence industry met with Zelenskiy, however, Naval Technology understands that representatives from BAE Systems were not at the meeting.

The Guardian also reported that in remarks made at the thinktank Chatham House, a senior aide to Zelenskiy, Andriy Yermak, said that the UK was ‘willing’ to provide weapons to Ukraine alongside the loan to cover the costs of ships.

Under the mooted deal, it is understood the first two vessels will be built in the UK with the subsequent six vessels to be manufactured in Ukraine.

The deal would be a boost for British shipbuilding and comes after Prime Minister Boris Johnson spoke about a ‘concerted national shipbuilding strategy’ at the Conservative Party Conference.

Ukraine’s naval capabilities were weakened when Russia annexed Crimea in 2014, the UK has been supporting the country’s development of new naval capabilities through several initiatives including the Maritime Training Initiative.

Unions praised the reported loan and possible sale, telling Naval Technology it was a vote of confidence in UK shipbuilding, but added that the UK government needs to go further to support the industry.

Confederation of Shipbuilding and Engineering Unions General Secretary Ian Waddell said: “This is a vote of confidence in UK shipbuilding, demonstrating our world-class skills and abilities. However, it underlines the need for our own government to back our industry by pressing ahead with a UK build for the Carrier fleet support ships.

“Highly skilled jobs are at risk due to a lack of work now the Aircraft Carriers have been launched, a gap that the government could immediately fill with the shovel-ready FSS contract.”

During the visit, the UK and Ukraine also signed a Political, Free Trade and Strategic Partnership Agreement and a memorandum of intent covering future defence collaboration.

Commenting on the partnership agreement, Prime Minister Boris Johnson said: “The UK is Ukraine’s most fervent supporter. Whether it’s our defence support, stabilisation efforts, humanitarian assistance or close cooperation on political issues, our message is clear: we are utterly committed to upholding the sovereignty and territorial integrity of Ukraine.

“The Strategic Partnership Agreement we signed today signals the next chapter in our relationship. It’s a chapter that will bring increased security and prosperity for both the people of the UK and Ukraine.”

Under the memorandum of intent, the UK’s Ministry of Defence said both countries would work together to develop Ukraine’s naval capabilities.

Commenting on the memorandum, Defence Secretary Ben Wallace said: “Defence is at the heart of the UK’s special partnership with Ukraine. I’ve been fortunate enough to visit Ukraine twice in the past year, where I expanded our commitment to supporting the Armed Forces of Ukraine.

“Now I am delighted to be able to welcome President Zelenskyy and Defence Minister Taran to explore how we can strengthen that relationship even further.”