European Commission will invest in additional artillery ammunition production capacities
On 15 March, European Commission allocated the €500 million foreseen under the European Union defence industry development regulation on supporting ammunition production (Act in Support of Ammunition Production, ASAP). This will allow the European defence industry to ramp up its ammunition production capacity to 2 million shells per year by the end of 2025.
Latvian company SIA “Valsts aizsardzības korporācija” (National Defence Corporation, LLC) is one of the undertakings that will receive funding for additional artillery ammunition production capacities according to the decision of the European Commission.
National Defence Corporation, LLC applied for project funding together with other partners of an international consortium – KNDS group companies in France and Italy, and NAMMO group companies in Norway and Finland. Application of the international consortium submitted towards the end of 2023 foresees implementation of a number of project activities across several countries, including Latvia where beneficiaries intend to set up production of modular artillery charge systems.
The total consortium project costs approved by the European Commission amount to €41.38 million. Grant agreement will be signed this May.
The aim of the Act in Support of Ammunition Production is to ramp and scale up ammunition production across Europe. Work programme adopted in October of 2023 was followed by publication of call for proposals on explosives, powder, shells, missiles production and testing capacities with deadline on 13 December 2023. The total budget approved by the European Commission of €513 million will be distributed among 31 selected project.
Together with industry co-financing, the estimated total budget of the initiative will exceed €1.5 billion. The whole Europe will benefit from major increase in artillery ammunition production capacities.
As announced earlier, Cabinet of Ministers approved the establishment of state-owned enterprise SIA “Valsts aizsardzības korporācija” (National Defence Corporation) in November of 2023. Enterprise will be solely owned by the Ministry of Defence as its only shareholder.
Mission of the state-owned enterprise will be to provide consolidated management of national defence industry investments. It will also coordinate military manufacturing and its different processes. Moreover, it will indirectly oversee the manufacturing and integration of military goods, technologies and components critical for the national defence sector.
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