Defence Industry Growth Facility

Purpose and Program Overview

The Defence Industry Growth Facility is a US$3 billion (approximately A$4.2 billion) Australian Government finance initiative announced on 28 August 2026. It expands and replaces the former Defence Export Facility, broadening its scope beyond export support to also cover sovereign capability development and domestic industrial growth. The facility is administered by Export Finance Australia through the National Interest Account.

Rather than operating as a traditional grant, the facility provides government-backed loans, bonds, guarantees and equity to Australian defence businesses. Its objective is to give defence companies, particularly small and medium enterprises, more timely access to capital for expanding operations, upgrading facilities, developing new Defence-aligned capabilities and pursuing export opportunities.

The facility forms part of a broader government push to strengthen Australia’s sovereign defence industrial base and reduce reliance on overseas supply chains. It is designed to complement, rather than replace, private investment by helping to attract additional private-sector finance into the defence sector.

Key Grant Details

• Funding type: Government-backed finance facility (not a traditional grant) comprising loans, bonds, guarantees and equity
• Total facility size: US$3 billion (approximately A$4.2 billion)
• Application open and close dates: Not yet published. The 28 August 2026 announcement did not include application windows or round dates.
• Eligible industries or business types: Australian defence industry businesses, with a stated focus on small and medium enterprises
• Required co-contributions: Not specified in the current announcement
• Location/state/territory applicability: National; the announcement does not restrict eligibility to a particular state or territory

Priority Sectors

The announcement does not list specific priority sectors. Support is directed broadly at the Australian defence industry, covering activities connected to export growth, facility expansion or upgrades, and the development of capabilities aligned with Defence priorities. Businesses working on sovereign defence capability and self-reliance projects are highlighted as a particular area of focus.

Funding Scope

• Minimum and maximum amounts per stream: Not disclosed. Individual financing limits have not been published.
• Categories or streams of funding: The announcement identifies three broad areas of support:
  • New defence export opportunities
  • Expansion or upgrading of industrial facilities
  • Development of new capabilities aligned with Defence priorities
• Forms of finance: Loans, bonds, guarantees and equity
• Project timeline or eligible funding duration: Not specified in the current announcement

Eligibility Criteria

• Businesses must operate within, or contribute to, the Australian defence industry
• Detailed applicant eligibility requirements have not yet been published.
• Operating within the defence sector alone does not guarantee that a project will be eligible.
• Small and medium enterprises are identified as a priority group, though this is not confirmed as a formal eligibility restriction.
• Further eligibility detail, including business structure, size, turnover and compliance requirements, is expected to be released in future program guidance.

Eligible Activities and Expenses

• Pursuit of new defence export opportunities
• Expansion or upgrade of industrial facilities and infrastructure
• Development of new capabilities aligned with Defence priorities
• Broader investment supporting sovereign defence capability and Australian self-reliance

Specific eligible expense categories, such as capital equipment purchases, staff hiring or research and development costs, have not been detailed in the current announcement.

Assessment Process

The Government has not published assessment criteria, application processes or approval timeframes for the Defence Industry Growth Facility. As the facility involves loans, bonds, guarantees and equity rather than non-repayable grant funding, it is reasonable to expect that applications will be assessed on standard financial criteria such as project viability, capacity to repay, and alignment with Defence and national interest priorities. Confirmation of the formal assessment framework is expected in future program guidance from Export Finance Australia.

Recent Program Updates

• The facility was announced on 28 August 2026 by the Albanese Government
• It expands and replaces the former Defence Export Facility, broadening its remit from export-only support to include sovereign capability development and domestic facility investment
• The facility increases the scale of government-backed finance available to the sector, with a headline commitment of US$3 billion
• Administration has been confirmed as sitting with Export Finance Australia via the National Interest Account
• Detailed program guidelines, application dates and eligibility criteria had not been released as of the announcement date

Application Tips

• Monitor Export Finance Australia and Department of Defence channels for the release of detailed program guidelines
• Assess whether a planned project relates to export growth, facility expansion or upgrades, or the development of Defence-aligned capabilities, as these are the facility’s stated priority areas
• Begin preparing financial statements, business plans and project documentation early, given the facility is expected to involve standard finance assessment processes
• Clearly demonstrate how a proposed project supports sovereign defence capability, self-reliance or export growth, in line with the Government’s stated objectives
• Avoid assuming automatic eligibility based on operating in the defence sector; confirm requirements once full guidance is published

Where to Get Help

Consider consulting a grant specialist like Pattens Group for a personalised eligibility assessment and expert assistance in preparing a strong, compliant and competitive application. Contact us today and get connected with Australia’s best grant specialist, boasting over 35 years of experience in the industry and a 100% success rate. For official guidelines, application details, templates, and further information, visit the official website of the Defence Industry Growth Facility and other associated Australian government websites.