Orka Submarines Procurement Funded with Money from the European Union?

According to Radio RMF FM, Deputy Finance Minister Paweł Karbownik announced that on Thursday a special team was formed, which is already working on preparing the loan applications. This team comprises representatives from the Ministry of Finance, the Ministry of Defence, and the Armament Agency. Poland will be eligible to apply for 20 billion euros from this 150-billion-euro pool, which is roughly 85 billion PLN.

Since these funds will be provided as loans, the European Commission will only verify formal and legal requirements and will not debate how the funds are spent. Poland plans to allocate 90% of these loans for domestic purchases and 10% for purchases within Europe. Deputy Finance Minister Karbownik informed RMF FM that it is precisely this 10% that will finance the purchase of three submarines under the Orka program.

If this comes to pass, it would be a step toward fully restoring the combat capabilities of our Navy. JPoland currently lacks the ability to build submarines and can only import them. Financing them through SAFE funds would mean losing the opportunity to purchase them from South Korea, while the remaining bidders, coming from Europe—namely Germany, Italy, France, Sweden, and Spain—would remain in contention.

Intensive intergovernmental consultations are currently underway within the Orka program. These consultations address the “additional” benefits stemming from the potential purchase of Orka submarines in various countries. It is expected that the next phase will involve the political-military selection of a partner or partners with whom the Armaments Agency will negotiate further.

Unconfirmed reports suggest that the current stage of the process may exclude the purchase of cruisze missiles launched in a submerged setting via torpedo tubes. However, the manufacturer must guarantee that its submarine can be integrated with the missiles, which Poland would select separately.

In summary, this anticipated approach to procuring Orka submarines, combined with securing financing from SAFE, could represent a breakthrough in the decades-long process (dating back to the 1990s) of acquiring brand-new submarines.

At the same time, it should be noted that 10% of the potential 20 billion euros in loans amounts to 2 billion euros. The estimated cost of purchasing one submarine could be several hundred million or even nearly 1 billion euros. In such a scenario, SAFE could finance the purchase of two units, and funding for the third would have to be arranged through other means. Additionally, the SAFE system, like other European projects, may require co-financing, which would then cover a larger portion of the contract cost for all three units.

Could this SAFE financing mechanism be the lifeline the Orka program needs?