€150m is the budget allocated to the National Defence Fund (FND). This 150 million is entirely separate from the 150 million that the government has already raised following the issue of its defence bond on 16 January. “This sum went straight into the budget and was used to fund the increase in the country’s defence spending,” said the Finance minister, 
Commitments to Nato
The €150m under discussion today will come from three sources: the Luxembourg Intergenerational Sovereign Fund (FSIL) will contribute €25m—or €5m per year—, the National Credit and Investment Corporation (SNCI) will contribute €75m—or €15m per year—and the budget will contribute €50m—or €10m per year.
Gilles Roth outlined the fund’s objectives and how it operates. “This new instrument, which forms part of the FSIL, enables the state to strengthen its collaboration with the private sector by investing in innovative companies and start-ups. The fund focuses on dual-use technologies (civil and military), which are crucial for sectors such as finance, cybersecurity, automation and smart materials.”
Whilst the scheme is designed to enable Luxembourg to meet its defence commitments to Nato, it also aims to ensure that tax revenues invested in the defence industry have a positive economic impact, making Luxembourg a net beneficiary. For the FSIL, it will serve as a means of generating a return on investment whilst diversifying risks.
SNCI as project manager
In practical terms, it is modelled on the Luxembourg Future Fund 2. It will invest in specialised venture capital funds as well as directly in individual companies, drawing on market expertise for these investments.
The aim is to use public funds as a means of attracting private capital.
“This fund is a key instrument of defence policy and forms part of the Investment Union at European level. The aim is to use public funds as leverage to attract private capital, in line with national and European Union military and investment strategies,” summarises the minister of Finance. He emphasises that this mechanism forms part of “a comprehensive strategy for economic diversification and the modernisation of the financial sector”.
Support for innovation and the defence industry
The minister of Defence, 
In line with the government’s defence industrial strategy, the focus will be on innovation, notably through participation in European programmes, the launch of national calls for proposals, and support for research and development via specific financial instruments. In her view, future conflicts will be won through technology. “It is therefore imperative to promote industrial innovation to ensure collective security whilst strengthening the country’s economic fabric.”
The country is focusing on innovative investment and cutting-edge technologies that can have dual-use applications (civilian and military).
Economic war
If there is one war that the minister for the Economy, 
Priority areas include materials and production technologies, robotics and artificial intelligence — “a priority sector that is already well established but needs to continue to grow within the defence sector”—and the space sector.
