Lithuania has signed a letter of intent with Rheinmetall as the German defense giant plans to build an ammunition factory in the Baltic state.
The information was announced by Lithuanian Minister of Economy and Innovation Ausrine Armonaite on April 16. According to Ms. Armonaite, Rheinmetall's investment will be one of the largest in Lithuania's history.
“It will boost our industry, our economy and regional security,” the minister said at a news conference in the capital Vilnius. “We are attracting investment that will generate profits and help us ensure our autonomy in arms procurement,” she added.
Negotiations have begun to reach a detailed investment agreement, Reuters reported. Lithuania expects the main works, including the construction of a factory to produce NATO-standard 155mm artillery shells, to begin by the end of this year, the Baltic Times reported.
Representatives of Rheinmetall sign a letter of intent with Lithuanian officials, including Prime Minister Ingrida Simonyte, Minister of Economy and Innovation Ausrine Armonaite and Minister of Defense Laurynas Kasciunas, on the construction of an artillery shell factory in the Baltic state, April 16, 2024. Photo: Delfi
The investment comes after the German government's decision to increase its permanent military presence in the Baltic state to around 5,000 within three years.
Lithuania spent 2.8% of its GDP on defense in 2023 and plans to spend the same this year. Furthermore, the Lithuanian government said in March that it plans to increase its defense budget to at least 3% of GDP from 2025 onwards.
Also at a press conference in Vilnius on April 16, Lithuanian Prime Minister Ingrida Simonyte told reporters that any project to strengthen and expand the capabilities of the European defense industry is an important step forward.
“I have no doubt that this project will also contribute significantly to the European initiative to make us all feel safer…”, said Prime Minister Simonyte.
Germany is also an important arms supplier to Lithuania. The Baltic state has purchased the Panzerhaubitze 2000 (also known as the PzH 2000) tracked self-propelled gun, jointly developed by Krauss-Maffei Wegmann (KMW) and Rheinmetall. The PzH 2000 fires NATO-standard 155 mm shells.
Lithuanian Defense Minister Laurynas Kasciunas said the Russia-Ukraine war showed the importance of having an independent supply of ammunition.
“One of the key lessons from the war in Ukraine is that local production of ammunition is a vital national security interest,” Bloomberg quoted Kasciunas as saying at a press conference. “This is something we have been working toward for years and it is becoming a reality . ”
Minh Duc (According to Anadolu, Kyiv Post, Bloomberg)
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