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EU grants over €130 mn to Rheinmetall for ammunition production expansion

Rheinmetall’s European subsidiaries will undertake six projects across Germany, Hungary, Romania, and Spain.
Sweden to boost 155mm artillery ammo production for Ukraine
155mm artillery ammunition. Photo: mil.in.ua
EU grants over €130 mn to Rheinmetall for ammunition production expansion

In a significant move to bolster ammunition production within the European Union, the EU has allocated over €130 million to Rheinmetall AG, a leading defense contractor.

This funding is part of the Act of Support in Ammunition Production (ASAP), aimed at expanding the production of 155mm artillery ammunition and powder, Rheinmetall reports. Ammunition remains one of the most urgent needs of the Ukrainian army, suffering from the artillery shortage.

Rheinmetall’s European subsidiaries will undertake six projects across Germany, Hungary, Romania, and Spain, accounting for more than a quarter of the total €500 million earmarked by the EU under ASAP.

ASAP represents the EU’s inaugural funding program dedicated to enhancing ammunition production capacities. The grant agreements are anticipated to be signed by May 2024. Armin Papperger, CEO of Rheinmetall AG, expressed gratitude towards the EU for recognizing the company’s role as a crucial supplier of 155mm ammunition. He highlighted the importance of artillery in the ongoing Russia’s war against Ukraine and the need for European armed forces to replenish their artillery ammunition stocks.

Rheinmetall has been proactive in increasing its production capabilities since 2022. The company aims to produce up to 1.1 million artillery shells annually by 2027, alongside up to 1.5 million propellant modules and 3,000 tonnes of RDX explosives each year starting in 2026.

The EU’s support for Rheinmetall’s projects underscores the growing emphasis on bolstering defense capabilities and ensuring a supply of critical ammunition. Further tenders are expected in the future, with the EU’s European Defence Investment Programme (EDIP) proposal seeking to promote the expansion of production capacities for other defense products as well.

Rheinmetall, a leading German arms manufacturer, has actively contributed to Ukraine’s defense efforts during the ongoing war with Russia. The company has undertaken several initiatives to support Ukraine, including:

Factory Establishment: Rheinmetall plans to set up four factories in Ukraine focused on producing shells, military vehicles, gunpowder, and anti-aircraft weapons. This move aims to bolster Ukraine’s defense industry and reduce reliance on Western aid.

Joint Ventures: Rheinmetall has formed a joint venture with Ukraine’s state concern, UkrOboronProm, to maintain, repair, and produce military equipment. This collaboration signifies a strategic partnership between Germany and Ukraine to enhance the latter’s defense capabilities.

Armored Vehicle Production: The company is set to commence the production of armored vehicles, including Fuchs armored transport vehicles and Lynx infantry fighting vehicles, in Ukraine by 2024. This initiative is part of a broader effort to rejuvenate Ukraine’s arms industry.

Leopard Tanks Supply: Rheinmetall has secured contracts to supply Ukraine with Leopard 1 tanks and Leopard 2A4 main battle tanks. These deliveries are scheduled for 2024 and are financed by the German government.

Tank factory and repairs: Rheinmetall is negotiating with Kyiv to set up a Panther KF51 tank production facility in Ukraine. Additionally, the company plans to repair Leopard tanks and other military equipment in the country.

Ammunition production: Rheinmetall aims to produce up to 600-700 thousand rounds of artillery ammunition per year for Ukraine. The company has also received orders worth millions of euros for artillery ammunition, including a wintertime order for over 100,000 shells.

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