US grants $920M loan to Romania to buy US-made weapons

U.S. Army Soldiers of 1st Battalion, 66th Armored Regiment, 3rd Armored Brigade Combat Team, 4th Infantry Division, setup their M1 Abram Tanks in Romania in a 2017 file photo. (DVIDS)

WASHINGTON — The US State Department has announced a new $920 million Foreign Military Financing (FMF) loan to Romania, in order to help the NATO ally procure US-made Abrams tanks and ammunition.

With Wednesday’s announcement, Romania becomes the second nation to receive such a specialized loan version of FMF, which is a new tool the State Department first rolled out in September 2023, when Poland received a $2 billion loan. In July of this year, Poland received a second $2 billion loan under the program.

FMF dollars have to be spent on US-made weapons. But unlike traditional FMF dollars, which are appropriated by Congress and work as grants handed to nations to fund the purchases, these State-authorized loans come with interest that will have to be paid back to the US government. For the Romanian deal, Washington put up $60 million to cover fees and guarantee the loan.

“Romania is undertaking a major military modernization program, including purchases of U.S. defense equipment such as Abrams main battle tanks and coproduction of ammunition,” a statement from the State Department reads. “Romania is a leader in NATO, working closely with Allies to advance Black Sea security and providing critical assistance to Ukraine, including the transfer of a Patriot strategic air defense system and training Ukrainian F-16 pilots.”

Last November, Romania announced plans to purchase up to 54 M1A2 SEPv3 Abrams Main Battle Tanks, with an estimated price tag at the time of $2.5 billion, which is the purchase this FMF money will go towards. But that’s just one of the modernization efforts the European nation has been pushing for.

Since the start of 2023, the State Department cleared seven Foreign Military Sales (FMS) requests for Bucharest. Aside from the tanks, 2023 saw requests cleared for $104 million for 95 Heavy Gun Carriers Joint Light Tactical Vehicles; an F-16 modernization effort with a $105 million estimated price tag; and 16 Assault Amphibious Vehicles at an estimated cost of $120.5 million. In 2024, Romania was cleared to buy $592 million in AIM-120 missiles, $80 million in Javelins — plus the crown jewel, $7.2 billion in 32 F-35A Joint Strike Fighters.