The UK’s commitment to Ukraine has seen billions of pounds worth of equipment and funding provided since 2022. Credit: UK MoD/Crown copyright
  • A new centre for industry will help UK firms support Ukraine’s Armed Forces in ongoing operations against Russia
  • Based in Kyiv, the centre is intended to boost UK support to Ukraine, as the countries mark the first year of a new 100-Year partnership
  • Builds on existing UK-Ukraine industry partnerships including the Octopus interceptor drone

The UK has marked the one-year anniversary of its 100-year partnership with Ukraine with an announcement that it will open a business hub in Kyiv this year in order to better position British defence industry in the Ukrainian market.

Detailed in a 16 January release, the UK Ministry of Defence stated the defence business centre will be provided three years of government-backed funding, targeted mainly to benefit the UK’s small and medium enterprise (SME) sector.

Citing challenges for UK SMEs in gaining a presence in Ukraine, including “travel restrictions, security, insurance requirements, and suitable premises”, the centre is planned to address some of these difficulties. It is unclear which challenges the centre will specifically address.

The centre is planned to open later in 2026 across “secure facilities in Kyiv,” providing an “export and matching service”, the MoD stated.

In addition, apparently UK companies will also be provided “with the latest data” to ensure lessons learned by Ukrainian operations on the frontline are adopted.

Ukraine SMEs could have edge over UK

Historically shunned by the MoD in preference for UK and overseas defence primes, British SMEs are instead being offered an opportunity to target markets such as Ukraine, where the achingly slow delivery times of conventional procurement are an irrelevance in a battlefield of constant evolution.

However, from information gathered during visits by Army Technology to Ukraine to learn more about the country’s defence SME sector, it is clear that UK companies will be challenged in attempting to compete with Ukrainian firms, who are able to test and evaluate far more quickly than European counterparts.

At an undisclosed location in Ukraine in 2025, Army Technology was able to gain further first-hand insight into the country’s defence SME sector. Credit: Author

An example of this was made clear in 2025, when UK SME MGI Engineering, which is developing modular loitering munitions and drones for the battlespace, was forced to shift its airborne trials to Spain on account of restrictive UK flight test protocols.

Such was the restriction during a ground test visit attended by Army Technology, that pilots performing the trials were instructed to crash the drone into the ground should it accidentally get airborne. The ramifications for the pilots’ own drone licenses would have been severe.

Ukrainian companies suffer from no such restrictions, with structures such as the ‘Army of Drones: Bonus Programme’ offering clear and easy to navigate pathways for Ukraine’s SMEs to supply frontline units.

Indeed, there are some voices that suggest Ukraine’s defence SME sector needs to consolidate in the coming years to avoid companies producing too many competing designs. The addition of UK offerings in the sector would further complicate matters and potentially cut out Ukraine’s own industry from its domestic market.

Ukraine-Russia war: Winter snapshot

Combat operations have continued along the frontline throughout the winter, predominantly through the massed use of drones from both Ukraine and Russia, while Moscow also continued to bombard Ukrainian cities, targeting sites of critical infrastructure such as water and power.

Russia was reported to have seized one of the key stronghold cities of Pokrovsk in December 2025 following months of heavy fighting.

Casualties continued to be severe with Ukraine in early January claiming that its forces had caused over 33,000 Russian combat losses, killed and wounded, with over 106,000 targets struck, a 31% increase from November.

The US Institute for the Study of War, providing its regular update on the Ukraine-Russia war, said that Russia held 19.32% of Ukrainian territory, down from an early 2022 high of 26.16%, but slight increase from the end-2022 low of 17.84%.

Losses on both sides have been catastrophic, with Russia ploughing through its inventory in short order – albeit apparently sustainably – while Ukraine has had to cast aside Western concepts of combined armed warfare to focus on drone-centric tactics.