Build with Ukraine: Why Joint Production Deals Are Scaling in 2026

By October 2026, the 'Build with Ukraine' programme has evolved from an experimental framework into a critical axis of European security. With Ukraine’s domestic defence production projected to hit $55 billion this year, the focus has shifted toward scaling these capabilities through international joint ventures. Europe gains access to combat-proven technology—iterated in real-time on the front lines—while Ukraine secures production capacity beyond the reach of Russian strikes and taps into EU financing mechanisms like the €300 million dedicated Ukraine support instrument under EDIP.

Recent milestones in joint production

The momentum of the initiative is evidenced by recent high-profile partnerships. In August 2026, Ukrainian firm Tencore and Finland’s Insta announced a joint venture to produce TERMIT 2.0 unmanned ground vehicles, targeting an initial production of 320 systems. This follows the February 2026 agreement between Germany’s Wingcopter and Ukraine’s TAF Industries to scale reconnaissance drone production. These projects demonstrate a shift toward a distributed manufacturing model that leverages European industrial infrastructure to meet the urgent requirements of the Ukrainian Defense Forces.

• Tencore (Ukraine) & Insta (Finland): Joint production of TERMIT 2.0 UGVs, with a target of 320 units.
• Wingcopter (Germany) & TAF Industries (Ukraine): Scaling reconnaissance drone production in Germany.
• Fire Point (Denmark): Solid rocket fuel and component plant, serving as a model for regulatory adaptation.
• Rheinmetall Ukrainian Defense Industry: The foundational JV model for large-scale industrial cooperation.

The five obstacles that stall the rest

• Export-control friction: While over 90% of export applications are now approved, industry groups have raised concerns regarding new 20-30% permit fees that may impact market competitiveness.
• Access to capital: EU instruments (SAFE, EDIP, EDF) are active, but long-term investment for smaller Ukrainian firms remains sensitive to political cycles.
• Certification maze: Harmonizing national, NATO, and information-security standards remains a primary hurdle for rapid deployment.
• IP protection: Ukrainian companies demand transparent, well-defined agreements regarding the ownership and modernization of combat-proven technology.
• Due diligence and governance: Effective KYC and integrity mechanisms are deal-critical as the scale of investment increases.

Strategic outlook for late 2026

The EU–Ukraine Defence Industrial Partnership, announced in July 2026, is expected to further harmonize these efforts. As the industry matures, the focus is moving from simple memoranda to complex, multi-jurisdictional corporate architectures. Global Miltech Legal continues to assist firms in navigating this landscape—from securing SSECU export clearances to structuring IP-assignment frameworks that satisfy both Ukrainian national security requirements and European investor standards.

The gap between a signed memorandum and a running production line is almost never technical. It is legal sequencing—in two jurisdictions at once.