Germany and Israel Aerospace Industries (IAI) on Sunday signed a $3.1 billion contract expanding the prior Arrow 3 defense system from the $3.5 billion initial Arrow contract signed between the parties two years ago.
The contract signing follows the December 17 approval of the deal by the German Bundestag and brings the total earnings on the two deals to over $6.5 billion, representing the largest Israeli defense export deal ever.
The announcement comes only one month after the initial Arrow 3 battery Israel provided to Germany was deployed at a major ceremony at Holzdorf Air Force Base, attended by The Jerusalem Post.
As part of the contract expansion, the Israeli Defense Ministry said that it and the German Defense Ministry (BMVg) “have agreed to significantly increase the production rate of Arrow 3 interceptors and launchers to be supplied to Germany, substantially enhancing its air and missile defense capabilities.”
For years, successive defense ministers have worked on the Israel-Germany Arrow project, with former minister Yoav Gallant signing a final deal, Director General Maj. Gen. (Res.) Amir Baram repeatedly visiting Germany, and Baram and Defense Minister Israel Katz focusing on expanding defense exports to significantly enhance the IDF’s force build-up and strengthen Israel’s defense industry and economy.
Additional documents related to the contract expansion were previously signed in Germany, led by Moshe Patel, the director of the Israel Missile Defense Organization (IMDO) within the Ministry’s Directorate of Defense Research and Development (DDR&D), and the Director General of the German Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support, Annette Lehnigk-Emden.
Other representatives of the IMDO, the BMVg, and IAI, the main producer of the Arrow, also attended the prior signing.
Baram noted, “The Arrow 3 contract expansion represents another significant milestone in our deepening strategic partnership with Germany, our key European ally. This landmark deal, valued at over $3 billion, embodies the IMOD’s strategy to expand defense exports.”
Arrow 3 now protects German skies, says Israeli official
Head of the DDR&D, Brig.-Gen. (Res.) Daniel Gold stated, “This represents significant confidence in the IMOD, Israel’s defense industry, and our bilateral relationship. The Arrow system, a cornerstone of Israel’s multi-layered air defense architecture that protected our citizens throughout this war, now stands guard over German skies.”
IAI President and CEO Boaz Levy added, “IAI’s pivotal role in Germany’s air defense array and the trust established with the German government were recently demonstrated during the delivery of the Arrow 3 system, just two years from contract signing.”
“The mutual trust, advanced technological capabilities – as proven in operational deployment – and adherence to timelines led the German government to approve the follow-on procurement of the Arrow air missile defense system,” Levy said.
Berlin’s historic deployment of Israel’s Arrow 2 and Arrow 3 defense systems in early December last year paves the way for additional European countries to purchase the system, German Air Defense Commander Col. Dennis Kruger told the Post in an exclusive interview at the time.
Asked if additional European countries would also purchase the Arrow from Israel, he responded, “I believe so. Germany has closed the capability gap. But [there are threats] for all over Europe. Germany is moving in first and setting a good example. We believe other nations will follow.”
Kruger added that Germany would want to purchase the Arrow 4 and 5 in the future, when they become operational, though that is expected to be some years off.