Portugal to decide F-16 replacement and launch satellite production under 5.8 billion euro defense plan

Oversight of the SAFE loan package

Portugal is executing a defense investment program financed through the European Union's Security Action for Europe (SAFE) loan mechanism, valued at 5.8 billion euros. The Chief of the General Staff of the Armed Forces (CEMGFA), General João Cartaxo Alves, defended the legal framework and transparency of the acquisitions in an interview with the Lusa news agency, his first since taking office. The European funding operates alongside the Military Programming Law (LPM) to accelerate the procurement of military hardware, including naval vessels, artillery systems, air defense platforms, armored vehicles, drones, munitions, and space infrastructure.

The defense plan has faced political scrutiny from opposition parties, including the Socialist Party (PS) and Chega, who cited opacity in the government's procurement process. Criticism focused on a 3.9 billion euro agreement to acquire three new-generation frigates from Italy, scheduled for delivery in 2029. Cartaxo Alves addressed the debate by outlining the administrative oversight structure established by decree-law.

If we look at this decree-law, it is all very clear how this SAFE investment will be made. I think there is perhaps too much controversy for what is already defined and stated on how it will be done, how it will be monitored, and how it will be executed.

Institutional monitoring and procurement structure

Cartaxo Alves noted that political coordination rests with four government departments: the Ministry of Foreign Affairs, the Ministry of Finance, the Ministry of Economy and Territorial Cohesion, and the Ministry of National Defense. These ministries form the Defense Investment Monitoring Commission (CAID). Operational execution is managed by a technical body within the Ministry of Defense, supported by finance and budget departments. Auditing is conducted by the SAFE Audit and Control Commission (CAC-SAFE), an independent supervisory entity created to ensure compliance across all contracts.

The SAFE mechanism allows Portugal to advance several long-planned military programs. In addition to the naval frigates, the funds cover the formation of an Army medium brigade equipped with new armored vehicles, as well as new air defense systems, artillery, and ammunition reserves.

Domestic satellite manufacturing in Alverca

Portugal will establish satellite manufacturing capacity in Alverca before the end of the year, creating infrastructure with export potential. The Alverca Space Hub aims to manufacture large satellites weighing more than 600 kilograms and is expected to recruit up to 50 aerospace engineers.

A capacity is being built in Alverca that could potentially be inaugurated by the end of October or November, and which will perhaps be one of the facilities with the highest satellite manufacturing capacity, even in Europe. And these are not small satellites, we are talking about satellites weighing more than 600 kilograms.

The space strategy builds on the Atlantic Constellation, an Earth observation initiative conducted jointly with Spain and funded by the Recovery and Resilience Plan (PRR). The constellation aims to provide imagery every 30 minutes for both military use and civilian emergency response, including flood tracking during severe storms, wildfire surveillance, and ocean temperature tracking. Portugal has already launched two synthetic aperture radar (SAR) satellites, purchased two additional units from the Finnish manufacturer ICEYE in June 2026 for launch later this year, and plans to add three to four satellites under the SAFE program in 2027.

Decision on F-16 fighter replacement

Cartaxo Alves also announced that the Portuguese government will decide on the replacement of its F-16 fighter fleet during 2026, with the procurement process integrated into the upcoming proposal for the revised Military Programming Law. Cartaxo Alves, who headed the Portuguese Air Force from 2022 until earlier in 2026, led recent aerospace expansion efforts within the military branch.