Lithuania to sign deal with Germany’s Rheinmetall on ammunition plant

By Leila Nezirevic

LONDON (AA) - Lithuania signed a letter of intent with Germany's defense industry giant Rheinmetall, which is planning to build an ammunition factory in the Baltic state, the government said on Tuesday.

Lithuanian Economy Minister Ausrine Armonaite said the Rheinmetall’s investment will be one of the largest in Lithuania’s history.

“It will give a boost to our industry, our economy, and the security of our region,” Armonaite said at a news conference in Vilnius.

"We are attracting an investment which will generate returns and will help us to ensure autonomy in purchasing the armaments," she added.

Lithuania expects the main works, including the construction of the 155mm ammunition factory, to start later this year, according to the Baltic Times.

However, a decision on recognizing the factory as a large-scale investment project could be made later this week.

“The company has submitted a large-scale investment project application, which is being evaluated by an institution authorized by the Economy and Innovation Ministry,” Armonaite said.

“If the criteria are met, we can also expect ministerial approval this week, paving the way for very concrete steps in this investment project,” she added.

The investment follows a decision by the German government to expand its military personnel in the Baltic country to around 5,000 within three years.

The Baltic country has spent 2.8% of GDP on defense in 2023 and is projected to spend the same this year.

However, the Lithuanian government said in March that it plans to increase the defense state budget to at least 3% of gross domestic product from 2025 onward.

Prime Minister Ingrida Simonyte told reporters at a news conference in Vilnius that projects that strengthen the European defense industry and expand its capacity represent an important step forward.

“I have no doubt this project will also significantly contribute to the European initiative for all us to feel safer, for our freedom to be better armed than tyrannies,” Simonyte said.