Nato will base a new innovation fund to invest in start-up businesses in the Netherlands, the military alliance has confirmed.

Nato member countries have committed €1 billion to the fund, which was announced at a summit in June last year. It is expected to focus on developing advanced technologies that can be used for military purposes, including AI, biotechnology and space exploration.

The Financieele Dagblad quoted Nato sources saying Amsterdam was the preferred location for the fund’s headquarters, but no decision has yet been taken. The fund will be officially launched at the next summit in Vilnius, Lithuania, in July.

The FD also said it had seen outline plans for the fund, presented at a closed meeting in Warsaw last autumn, which said it would run for a 15-year term, allowing Nato to invest long-term in developing technologies, and could generate two spin-off funds if successful.

It also aims to reduce bureaucratic obstacles which Nato says deters young start-up companies from investing in defence.

One advantage the Netherlands had over other bidders, including Luxembourg, is that the market regulator AFM has a relatively fast admissions procedure, according to the FD’s sources.

The 15-year lifetime has been confirmed by the Nato and the Dutch government, which is contributing €55 million. The United States is the only Nato member not paying into the fund, for unspecified reasons.

Economic affairs minister Micky Adriaansens said: ‘The NATO Innovation Fund positions the Netherlands even more firmly among investment funds for innovative companies.

‘In this way, we are strengthening what our country is good at, namely working on solutions for the future.’