The 2025-2029 Common Funding Resource Plan
Report by the Resource Policy and Planning Board
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Introduction
1. The annual Common Funding Resource Plan (CFRP) reflects an overarching and comprehensive five-year resource plan for Council’s consideration and decision. The CFRP builds on the submission by the military Budget Holders to the Military Committee of Medium Term Resource Plan (MTRP) requirements (for the Military Budget and the NATO Security Investment Programme (NSIP)), on the submission by Host Nations of the NSIP resource requirements, and on the International Staff submission of the Medium Term Financial Plan (MTFP) (for the Civil Budget). These inputs were then subject to the consideration and assessment by the Military Committee, the Investment and the Budget Committees, whose conclusions and recommendations informed this Resource Policy and Planning Board (RPPB) report.
Aim
2. The purpose of the CFRP is to provide an overview of the common-funded resource demands over the next five years, and to assess the medium-term feasibility and affordability of previously endorsed and future common-funded programmes and requirements, including workforce. Recognising Allies’ commitment to the financial trajectory endorsed at the Madrid Summit, this CFRP recommends for Council approval the 2025 ceilings, and seeks Council notation of the planning figures for the four outer years (from 2026 to 2029) and of the indicative figures for 2030.
Strategic context
3. The gravely altered security environment has led NATO to reset the strategic direction of the Alliance, with an increased Level of Ambition and a new baseline for deterrence and defence, as approved by Heads of State and Government at the 2021 Brussels, 2022 Madrid and 2023 Vilnius Summits. These decisions have, in turn, direct resource implications for NATO common funding. The indispensable and distinctive role of common funding was reinforced in 2023 in providing capabilities benefitting the whole Alliance, and common funding remained a powerful expression of equitable burden sharing and resolve amongst Allies.
4. The Comprehensive Report on Deterrence and Defence, approved by Council and endorsed at the Vilnius Summit, addressed the steps being taken to adapt the Alliance towards a new era of collective defence. These steps are underpinned by Allies’ efforts to better align their national operational and defence planning processes with the Concept for Deterrence and Defence of the Euro-Atlantic Area (DDA), in accordance with the Political Guidance for Defence Planning 2023, as well as Allies’ commitments to Article 3 of the Washington Treaty and the Defence Investment Pledge. Common funding has and will continue to have an important role, complementary to national and multinational efforts, to support Deterrence and Defence.
5. The adequate funding of the Alliance’s resource requirements will continue to have a direct impact on NATO’s three core tasks (deterrence and defence, crisis prevention and management, and cooperative security), Allies’ political-military decisions, including in relation to the DDA Family of Plans and the NATO Warfighting Capstone Concept (NWCC). In this regard, common funding continues to operate as a key enabler and force multiplier in meeting NATO’s Level of Ambition, supporting the three core tasks, the implementation of DDA and the NWCC. Most notably, the DDA Family of Plans and the associated force, Command and Control, readiness, interoperability as well as interchangeability and enablement requirements are the central drivers of NATO’s new baseline for deterrence and defence. They will form the basis to refine the specific and enduring requirements in future common funding resource planning cycles.
Overview of NATO common funding
6. The CFRP is a strategic tool that allows Council and senior decision makers in capitals to have a holistic view, from a NATO Enterprise perspective, on the requirements and main resource drivers for NATO common-funded budgets and programmes, and to allocate resources appropriately. The CFRP covers NATO’s three common funding sources: the NSIP, the Military Budget, and the Civil Budget. Together, they resource a wide range of capabilities, enabling the Alliance to Consult, Command and Control, Prepare, Inform, Engage, Project, Protect/Defend and Sustain.
7. The Common Funded Capabilities Framework enabled the Strategic Commands to develop a Strategic Capability Development Plan (SCDP), which aims to provide a comprehensive picture of current and future common-funded capabilities being implemented or under development, not only across the five years of the CFRP but out to a ten-year time horizon. The SCDP informed the development of this CFRP.
8. The implementation of the DDA Family of Plans will continue to evolve, requiring adequate human and financial resources to be provided by Allies and NATO over the planning period. Although various requirements are being addressed as part of ongoing capability development, not all DDA requirements are yet included in the current CFRP. As DDA implementation continues to progress, additional and new capability requirements will need to be brought forward, refined, prioritised and updated in future resource plans, in line with existing policies and procedures, to enable informed decisions on the use of available resources and to make full use of all available mechanisms to ensure timely implementation thereafter.
2025-2030 Common Funding Resource Requirements
NATO Security Investment Programme
9. The NSIP continues to contribute directly to deterrence, defence and security, by supporting capability development and delivery, particularly on air, land and naval facilities, bulk fuel pipeline systems and storage, reinforcement, sustainment and enablement capabilities, information and communications technology and networks (including deployable and satellite communications) as well as readiness initiatives.
10. In terms of the total approved programme (EUR 5,651 million from 2025 to 2030), the majority of the forecasted expenditure relates to Command and Control – Communications and Information Systems, followed by Basing/Facilities and Petrol, Oil and Lubricants. In terms of the future requirements identified by the Strategic Commands, the main forecasted expenditure relates to the Capability Programme Plans for the Nuclear Consultation, Command and Control, for Air Basing, and for Maritime Facilities. These are aligned with the Digital Backbone and Readiness Key Requirement Areas, which were defined as priority by the Military Committee.
Military Budget
11. The Military Budget contributes, inter alia, to strengthening NATO’s deterrence and defence posture, provide core military capabilities, fulfil responsibilities assumed by NATO in Alliance Operations and Missions, and to foster interoperability of Alliance forces and in Cooperative Security. NATO Military Authorities’ have planned over 600 military requirements alone in support of DDA and the NWCC, in addition to other ongoing requirements, and submitted prioritised military resource requirements at a total amount of EUR 2,459.2 million for 2025. The number and amount of the requirements are a reflection of the radically changed security environment and are built on the adaptation of the deterrence and defence posture, through DDA, and the NWCC (implemented through the Warfare Development Agenda) aimed at maintaining NATO’s decisive military advantage.
12. In its advice to Council on the 2025-2029 MTRP, the Military Committee has approved that the full military requirements outlined in the 2025-2029 MTRP submission are valid for achieving the DDA Family of Plans and the NWCC, acknowledging that the Budget Holders’ submitted adjusted requirements are above the figures corresponding to the Madrid Summit decision on common funding. The Military Committee considered strategic risk mitigation, including the acceptance of a EUR 7.7 million operational risk proposed by the Budget Holders with their submission, and if necessary, the possible extension to EUR 38.2 million as acceptable, following consideration of the Budget Holders’ assessment of the indicative high-level operational risks and impacts related to requirements. The full military requirements underscore the breadth of NATO’s operational ambition and strategic necessities. The Military Committee affirmed its dedication to upholding NATO’s operational effectiveness and strategic deterrence to ensure NATO is fully equipped, prepared, and strategically positioned to fulfil its mission of safeguarding the peace and security of the Euro-Atlantic Area.
13. Details per budget group are provided below.
13.1. The NATO Command Structure Entities and Programmes (NCSEP) Budget Group, comprising the most Tier 1 elements in the Capabilities Framework (‘Consultation, Command and Control’, ‘Prepare’, ‘Project’, ‘Protect/Defence’ and ‘Sustain’) enables the well-functioning of NATO’s military command structure and supports further progress in transforming SHAPE into a Strategic Warfighting Headquarters with streamlined processes and communication lines with the subordinate commands (including the integrations of the Joint Force Command Norfolk,the Joint Support and Enabling Command and the Joint Electronic Warfare Core Staff into the NATO Command Structure. This Budget Group covers the operating and maintenance (O&M) costs of common-funded capabilities, and supports the sustainment of future operations and missions while enabling immediate responses in times of crisis (including humanitarian support).
13.2. The Alliance Operations and Missions (AOM) Budget Group, included in the Tier 1 Capability Framework ‘Engage’, covers the resource requirements for the NATO Mission Iraq (NMI), the Balkans Operations, Operation Sea Guardian, and the NATO African Union Cooperation. Key resource drivers for NMI are the planned uplift in the total number of personnel in-theatre, the initial take-over of mission-specific enablers from the Coalition and an uplift in Information and Communications Technology (ICT) services. For Balkans Operations, the main increases are due to the O&M tails of the Urgent and Critical Requirements in the infrastructure and ICT areas planned for implementation in 2025, while uncertainties remain related to anticipated additional requirements, inter alia, for capabilities requiring skilled personnel with requisite qualifications and professional experience to fulfil specialist roles.
13.3. The NATO Intelligence, Surveillance and Reconnaissance Force (NISRF) Budget Group, included in the Tier 1 Capability Framework ‘Inform’, covers the critical provision of Joint Intelligence, Surveillance and Reconnaissance (JISR) to military commanders. Noting that in 2025 the NISRF will continue its efforts to reach Full Operational Capability, key resource requirements for 2025 result from emerging operational requirements (increase in flying hours and operational duration while maintaining a high tempo of operations due to the Russian war of aggression against Ukraine), emerging obsolescence issues (leading to several Engineering Change Proposals) and emerging technology and market opportunities (such as the Future Sustainment Requirements and NATO Support and Procurement Agency (NSPA) System Engineering Support). The NISRF financial profile assumes that multi-year In-Service Support contracts can be placed.
13.4. The NATO Airborne Early Warning and Control Force (NAEW&CF) Budget Group, included in the Tier 1 Capability Framework ‘Inform’, is also a fundamental JISR capability, critical for NATO’s deterrence and defence posture in the current security environment. The operational demand on the NAEW&CF remains consistently high, and has required the NAEW&CF to operate at a level that exceeds the baseline tasking stipulated in SACEUR's Concept of Operations for the NAEW&C Force. Key resource requirements for 2025 are the increases in training costs due to the upgrade of the Flight Management Software Suite on the Flight Training Devices, revised aviation fuel estimates and additional costs in the vehicle replacement plan, which are partially offset by reductions in maintenance events and completion of the Final Lifetime Extension Programme.
Civil Budget
14. At the core of the Alliance, the Civil Budget funds the functioning of the NATO Headquarters and the International Staff, enables NATO Nation’s consultation and decision making process, oversees policy development and contributes to the implementation of significant politico-military decisions and priorities, and the three core tasks.
15. Key Civil Budget resource requirements to ensure Collective Defence, against all threats from all directions, include accelerating interoperability and standardisation, additional investments into Data and Artificial Intelligence-related capabilities, advancing multinational and common-funded capability delivery and enablement, also covering cyber, counter-terrorism, hybrid, energy, data science, innovation and climate change domains. Crisis Prevention and Management will benefit from more training and preparedness, enhanced situational awareness, stabilisation and counter terrorism operations, supporting civilian crisis management and relief operations. Strengthening NATO’s role as a global stakeholder is paramount for Cooperative Security, as are the outreach activities to NATO partners in a 360-degree approach, including the Southern neighbourhood and the Indo Pacific, as well as enhanced work with other multilateral organisations such as the European Union at Staff-to-Staff level. Resource requirements include efforts to strengthen NATO’s footprint in Bosnia and Herzegovina, Georgia, the Republic of Moldova, and Ukraine, and other current and newly-created NATO satellite offices, as well as the continued development of existing Partnerships frameworks.
16. When comparing this MTFP with the figures corresponding to the Madrid Summit decision on common funding, the differences are primarily explained by the reinforcement of the NATO Representation in Ukraine (NRU). In addition, differences arise from 2027 onwards from the anticipated requirements for the NATO HQ Adaptation Programme, for which costs were not included in the 2024-2028 CFRP. These costs were possible to absorb in 2025, 2026 and 2029, but not for 2027 and only partially for 2028.
17. Recognising the urgent political priority that Allies have placed on expanding the NRU, the RPPB concurs with the Budget Committee recommended uplift of up to EUR 15.1 million above the figures corresponding to the Madrid Summit decision on common funding, since the magnitude of this requirement and its exceptional nature for the Alliance was not foreseen and thus not included in the 2024 2028 CFRP.
New Requirements not Costed in MTRP/MTFP Submissions
18. In addition to the aforementioned projected requirements identified and costed in the Budget Holders’ submissions, a number of new requirements are also addressed as part of this CRFP to ensure a holistic presentation to Council of all known requirements and to assess affordability for 2025. Some of these requirements result from political decisions that occurred after the submissions (NATO Security Assistance and Training for Ukraine, NATO-Ukraine Joint Analysis Training and Education Centre, NATO Integrated Cyber Defence Centre, the establishment of an independent Programme Office to establish and run an enhanced Air Command and Control Capability), and could therefore not be anticipated by Budget Holders. Other requirements (NATO Mission Iraq Enabler Transition Planning, NCS workforce and civilianisation, Host Nation Support for Collective Defence) were anticipated by the Budget Holders and thus reflected as uncertainties in their submissions, as the exact nature of the requirements was unknown or costings were not sufficiently mature and therefore not included in the figures presented in the MTRP and MTFP inputs. In the meantime, initial resource estimates for these initiatives have become available and could therefore be assessed as part of this CFRP. In some cases, the RPPB provided specific resource advice to Council which has also been captured as part of this CFRP.
19. Overall, for 2025 these new requirements amount to potential additional resource requirements of EUR 122 million on NSIP, EUR 87.8 million on the Military Budget and EUR 0.5 million on the Civil Budget. Continuing resource requirements from 2026 onwards are not included in the planning or indicative figures for this CFRP and will be addressed as part of the next resource planning cycle. In line with standard processes, these requirements will be subject to further refinement, validation and prioritisation.
New Requirements with specific RPPB Resource Advice
20. NATO Security Assistance and Training for Ukraine (NSATU) – The Council noted the RPPB’s position that the requirement for NSATU was not known nor taken into account at the time of the Madrid Summit decision on common funding and as such constitutes a new additional requirement. NSATU requirements for 2025 are estimated at EUR 39.8 million from the Military Budget. Council noted the RPPB agreement that they can be made affordable from agreed or planned allocations, through reprioritisation, or in the form of supplementary allocations, in line with the provisions of PO(2013)0056, to be used exclusively for NSATU. NSATU requirements from the NSIP for 2025 are estimated at EUR 50 million. The impact on NSIP can be considered affordable and manageable within existing and planned ceilings. Council approved these figures as the annual reference amounts noting that resource requirements and cost estimates are not exhaustive and would be further refined as part of extant operational and resource planning processes.
21. NATO-Ukraine Joint Analysis Training and Education Centre (JATEC) – on 15 February 2024, the NATO-Ukraine Council Defence Ministers took the political decision to endorse the establishment of JATEC in Bydgoszcz, Poland. The RPPB’s initial resource advice, noted by Council, took into consideration the options regarding the final vehicle for JATEC. The estimated annual costs for JATEC (Initial Operational Capability) are at EUR 4 – 4.3 million plus EUR 3.5 – 7 million for one-off investment in Communications Information Systems (CIS) infrastructure. Council’s approval to use Option 2 (Joint civilian-military Centre under ACT) as the initial vehicle for JATEC to be launched in the autumn of 2024 means that JATEC would be eligible for common funding as soon as activated as a NATO Command Structure entity. As these initial estimates have not been included in the 2024 Budget nor in the Budget Holders’ MTRP submissions for the 2025-2029 CFRP, they constitute a new requirement. Council noted the RPPB agreement that these resource estimates can be made affordable through a combination of re-prioritisation efforts and the possible use of available lapses from previous years’ Military Budgets, whilst recognising Allies’ commitment to the financial trajectory endorsed at the Madrid Summit. Council also noted the RPPB agreement that the resources needed for the set-up of the permanent CIS infrastructure can also be made affordable. Additional resource advice will be provided to Council to capture potential changes, if any, to JATEC’s funding model. This will be complementary to future political-military assessments and evaluations of JATEC.
22. NATO Integrated Cyber Defence Centre – the NATO Integrated Cyber Defence Centre aims to facilitate civilian-military coordination and cooperation by bringing together NATO, Allied, and industry stakeholders at all times during peace, crisis and conflict. The Council noted the rough order of magnitude cost estimates for 2025 (NSIP EUR 10 million, Military Budget EUR 9.5 million, and Civil Budget EUR 0.5 million) and that the RPPB considered that the currently-defined Phase 1 requirement for the Centre (2024-2025) can be made affordable through a mix of the possible use in 2025 of available lapses from previous years’ Military Budgets and a reprioritisation of the requirements in support of the implementation of DDA and NWCC. As the actual scale of the Centre is to be determined by the February 2025 Defence Ministerial Meeting and the resource estimates to be refined by then, the RPPB will update its initial resource advice in time for that meeting.
New Requirements without specific RPPB Resource Advice
23. NATO Mission Iraq (NMI) Enabler Transition Planning – this is one of the uncertainties included in the Budget Holders’ input to the MTRP and is dependent on military political discussions and decisions that are expected later in 2024. Council has tasked the NATO Military Authorities to expedite planning for self sustainment, but military requirements for this transition are yet to be fully defined. If the need for anticipated self sustainment of NMI materialises, the potential financial impact on the Alliance Operations and Missions Budget for NMI for 2025 could be an increase of up to EUR 18.4 million beyond the currently estimated budget of EUR 28.5 million.
24. NATO Command Structure (NCS) workforce and civilianisation – this is also one of the uncertainties included in the Budget Holders’ input to the MTRP. Since the MTRP submission, the Military Committee has endorsed the uplift of the NCS Peacetime Establishment (PE) Ceiling for a total of up to 10,060 by 2027 (at annual cost of EUR 105.2 million when fully implemented in 2027) and agreed to an approximate civilianisation rate up to 17 percent for Allied Command Operations and 40 percent for Allied Command Transformation as a baseline for further development. The Council and Defence Ministers have approved these recommendations. While exact numbers are subject to further assessment tasked by the Military Committee, the potential financial impact on the Military Budget in 2025 is estimated at EUR 15.8 million, taking into account potential delays in recruitment and onboarding of personnel. The RPPB notes that the resource implications from the civilianisation will impact future budget submissions.
25. Host Nation Support Concept for Collective Defence – this is one of the uncertainties included in the Budget Holders’ input to the MTRP. Since the MTRP submission, the Military Committee has agreed the final concept and the Council and Defence Ministers have approved their recommendations. The projected potential financial impact in 2025 on the NSIP is estimated at EUR 52 million.
26. Enhanced Air Command and Control Capability (eAirC2) – The Council approved the Conference of National Armaments Directors (CNAD) recommendations for an open, transparent and rapid process on how to assess available technologies and to deliver an eAirC2 capability, based on an open architecture and the federation of multiple systems. Council approval of the eAirC2 capability, based on recommendations from the CNAD, was further accompanied by the recommendations from the RPPB, the CNAD and the Military Committee to establish a Complex Armaments Programme for this capability. The most recent information available indicates a potential impact of EUR 10 million per year from 2025, associated with the establishment and the running of an eAirC2 ‘independent Programme Office’ (iPO). The Board will provide resource advice before the end of 2024, based on the iPO incremental implementation plan (which is due by 30 October 2024).
27. NATO School Oberammergau Facilities – there is a need to replace the current facilities hosting the support staff due to infrastructure obsolescence, poor health and safety conditions and inadequate fire prevention systems. This requirement was not foreseen as part of the Investment Committee advice and no resource estimates have been made available at this stage pending the estimated submission of an Urgent Requirement, subject to RPPB confirmation of eligibility and a decision by the Investment Committee.
Evaluation of Affordability
28. Taking into account the advice from the Military Committee, the Budget Committee and the Investment Committee, as well as the resource implications from the new requirements, the RPPB has evaluated affordability for the Civil Budget, the NSIP and the Military Budget and recommends the 2025 ceilings and planning and indicative figures as outlined below. The Board stands ready to consider on a case-by-case basis any ceiling increases that may be necessary in 2025 on the basis of advice from the Investment Committee and the Budget Committee.
Civil Budget Evaluation of Affordability
29. The RPPB recommends a total Civil Budget contribution ceiling of EUR 462.5 million in 2025, noting the planning figure of EUR 518.2 million for 2026 and EUR 660.1 million for 2029, with an indicative figure of EUR 689.3 million for 2030 (planning and indicative figures will be refined in subsequent MTFPs).
NSIP Evaluation of Affordability
30. The RPPB recommends an NSIP ceiling of EUR 1,722.5 million in 2025 in line with the figures corresponding to the Madrid Summit decision on common funding, noting the planning figure of EUR 2,207.5 million for 2026 and EUR 4,580.0 million for 2029, with an indicative figure of EUR 5,838.2 million for 2030. The Board assesses that although the new NSIP resource requirements have not been included in the Host Nation and Budget Holder submissions, these can be accommodated within the recommended ceiling for 2025, recognising that requirements will be subject to further refinement, validation and prioritisation.
Military Budget Evaluation of Affordability
31. The RPPB recommends a Military Budget ceiling of EUR 2,317.7 million in 2025, in line with the figures corresponding to the Madrid Summit decision on common funding. The RPPB recommends that Council note the planning figure of EUR 2,773.5 million for 2026 and EUR 3,631.9 million for 2029, with an indicative figure of EUR 4,664.5 million for 2030 (planning and indicative figures will be refined in subsequent MTRPs).
32. The recommended ceilings for the Military and Civil Budgets will enable the preparation and detailed screening of the 2025 annual estimates, which will be submitted to Council for approval by the end of 2024.
Ensuring the effective use of common funding
33. Transparency, accountability, management performance and efficiency are the fundamental principles of good governance and will remain a focus of RPPB attention towards ensuring the effective use of common funding:
34. In March of this year, Council has noted the RPPB status update on the broader efforts taken towards implementation of additional measures for enhancing transparency, accountability, management performance, and long-term efficiencies in common funding. In response to a Vilnius Summit tasking, the RPPB is discussing an Accountability and Performance Framework and a Performance Management Approach. The Accountability and Performance Framework is based on five core principles driven from international best practices. The Performance Management Approach seeks to analyse and report on the delivery status and performance of military common-funded capabilities and activities and aims to improve visibility and transparency of military common funding resources used at NATO.