On Thursday, a memorandum of understanding was signed in Germany for the establishment of a Rheinmetall munitions factory in Latvia, Prime Minister Evika Siliņa’s (JV) communications adviser Anna Ūdre announced.
According to the Ministry of Economics (MoE), a joint venture will be created for the project, with more than 200 million euros in investments planned. Within ten years, the factory’s exports could exceed 3 billion euros. Construction is scheduled to begin in spring 2026, with production set to start a year later. Earlier this week, the government approved the project by endorsing the information report “On the Establishment of an Artillery Ammunition Plant in Latvia.”
At the signing, Siliņa called the moment “historic for Latvia, for the defense sector, and for cooperation between Latvia and Germany.” She stressed that the memorandum signals Latvia’s readiness to form a long-term partnership with one of the world’s most influential defense manufacturers.
“The new factory will significantly strengthen ammunition supply security in the Baltic region and Northern Europe,” Siliņa said, adding that it also represents an opportunity for Latvia to gain technological know-how and increase its economic potential.
Meeting with Rheinmetall CEO Armin Papperger, the Prime Minister emphasized that
the agreement lays the foundation for long-term cooperation
serving both Latvia’s and its allies’ security interests. Still, she noted that this memorandum is only the first step, and much work lies ahead to implement the project in practice.
The memorandum of understanding, signed between Rheinmetall and the state-owned Valsts aizsardzības korporācija (State Defense Corporation), also foresees broader cooperation between the Latvian and German defense industries.
According to the corporation’s board member Ingrīda Ķirse, Latvia offers all necessary conditions for the factory: “The corporation’s mandate to supply the National Armed Forces and build Latvia’s defense industry capacity, combined with Rheinmetall’s long-standing expertise, high standards, and global reputation, forms the basis for a strong partnership that will both strengthen industry and enhance security in Latvia and the region.”
The project will follow on from the State Defense Corporation’s first major initiative — the ROLLO modular artillery propellant charge plant, now entering practical implementation.
The MoE underlined that the artillery munitions project will strengthen Latvia’s industrial base,
innovation capacity, and economy through new jobs and export growth, while also deepening the country’s integration into the EU’s defense industry.
Earlier this year, the Cabinet of Ministers approved the Defense Industry and Innovation Support Strategy 2025–2036. Under this strategy, the MoE, Ministry of Defense, State Defense Corporation, and the Investment and Development Agency of Latvia (LIAA) have launched close cooperation on defense industry projects. The MoE has allocated more than €200 million to support defense industry initiatives — including business incubation, R&D, product commercialization, and large-scale investment projects.
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