The increase in Spain’s defense budget is beginning to have a considerable impact on the industry. In 2025, nearly €12.5 billion of effective expenditure was linked to investments and financing for companies in the sector, representing approximately 53% of the €23.333 billion designated for defense spending during the fiscal year, according to the methodology used by the National Security Observatory of Opina 360.
The study, based on budget execution data from the General Intervention of the State Administration (IGAE), reveals a change that extends beyond the growth of the military budget. A significant portion of this effort is reaching the industry through modernization programs, acquisition of new systems, and loans aimed at financing their development.
The almost €12.5 billion can be broken down into three main categories. The ordinary modernization programs for the Armed Forces executed €1.322 billion, which is a 14.6% decrease from the previous year, although their volume has multiplied in recent years. The Special Modernization Programs (PEM), which include some of the largest military equipment projects, reached an effective expenditure of €5.610 billion, an increase of 73.1%. Additionally, there are €5.558 billion in loans aimed at facilitating the necessary financing for companies to develop the projects, an amount that nearly quadrupled from the previous fiscal year.
The total amounts to €12.490 billion. It is important to clarify that not all of this money has the same nature. A portion corresponds to investments made within military programs, while another part consists of financing through loans that companies must repay under the terms established for each project. Therefore, simply referring to public subsidies or aid would not accurately describe the mechanism used.
€31.793 billion awarded for the coming years
The expenditure executed in 2025 provides a snapshot of the money effectively mobilized, but it does not alone reflect the size of the commitments made for future years. To understand that, one must look at the awards made.
The report Rearme 2025, also prepared by the National Security Observatory of Opina 360, estimates that €31.793 billion worth of equipment contracts were awarded during the year by the main contracting bodies analyzed. The study reviewed 2,195 files and 2,590 awards based on the Public Sector Contracting Platform, also incorporating five projects commissioned directly to Navantia through execution orders.
The difference between the €12.490 billion in effective spending and the €31.793 billion awarded is critical for correctly interpreting the figures. A large military program may be awarded in 2025 for several billion euros, but its manufacturing, deliveries, and payments are spread out over five, seven, or even more years. The total value appears as an awarded contract, while only the portion corresponding to that fiscal year is included in the 2025 budget execution.
The substantial growth in awards is primarily related to the new Special Modernization Programs incorporated into the Industrial and Technological Plan for Security and Defense. According to Rearme 2025, 29 direct awards related to these major programs were made during the year through negotiated procedures without publicity, totaling €27.987 billion.
The contracted portfolio thus anticipates a workload for the industry that will extend well into the next decade.
Airbus, Indra, and Navantia lead the awards
The distribution of contracts shows a high concentration around a small number of large companies. According to the calculations from Rearme 2025, Airbus holds the top position with awards totaling €8.108 billion, equivalent to 25.5% of the analyzed volume.
Following the aerospace group are the temporary joint ventures formed by Indra and Escribano Mechanical & Engineering, with €7.611 billion and 23.9% of the total. Navantia follows with €5.812 billion, or 18.3%, while Indra also appears individually with another €5.667 billion. The technology company also participates, along with Telefónica, in a joint venture attributed with €950 million in awards.
This classification requires some caution because the same company may appear individually and as part of different joint ventures. It would not be correct to sum all those amounts and attribute the total result entirely to a single company. However, it does allow us to see that Airbus, Indra, Navantia, and the business alliances built around major programs concentrate a considerable portion of the new business generated by Defense.
At a considerable distance, other companies emerge. Urovesa is noted with €420 million, Santa Bárbara Sistemas with €302 million, Volvo with €224 million, and Rheinmetall with €178 million. The report estimates that Spanish companies traditionally linked to…
