NATO member Romania, which borders Ukraine, on Wednesday signed an agreement with the United States for a $920-million loan to modernize its military capabilities.
The eastern European Black Sea nation, which has gained in strategic importance since Russia invaded Ukraine in 2022, has been looking to increase its defence purchasing.
The procurements to be financed with the loan are meant "both to fulfil the commitments undertaken as a result of being a NATO and EU member state and to deter a possible aggression against Romania," the government said.
At the signing ceremony in Bucharest on Wednesday, US ambassador Kathleen Kavalec said the loan marked "our shared commitment to ensure peace, stability and security in the region".
The loan -- with lower interest rates than those at which the Romanian state usually borrows -- will have a repayment period of 12 years.
From the loan, $220 million will go towards creating "a centre of excellence in the production of 120-155 mm large calibre ammunition," Economy Minister Radu Oprea.
"This centre means that Romania will become the only producer of ammunition for the Abrams tank in Europe and from here we will export to all of Europe and beyond," he said.
Romania hosts more than 5,000 foreign troops, the largest contingent anywhere in NATO's southeastern region.
It is also home to a new F-16 pilot training centre, where Ukrainians recently started to train.
The US State Department said earlier this month that it had approved the sale of dozens of F-35 fighter jets to Romania. The deal, worth $7.2 billion, is still awaiting US Congress approval.
Romania announced in June that it would send a Patriot missile system to Ukraine, on the condition of continuing negotiations with the United States and other allies to obtain a similar or equivalent system to protect its own airspace.
The country of 19 million people has repeatedly found drone debris from fighting in Ukraine in its border region.