German arms giant Rheinmetall has signed an agreement to build a new ammunition factory in Lithuania, authorities in the Baltic state said on Monday.
Economy Minister Aušrinė Armonaitė said Rheinmetall would invest more than €180 million ($195 million) in the new plant, which is expected to produce 155-millimetre artillery shells. At least 150 jobs are set to be created at the new factory.
Armonaitė described the agreement as an "extremely important step towards meeting Lithuania's immediate defence and security needs." She added: "It will help us to ensure uninterrupted access to essential weapons and ammunition."
The location of the plant is to be announced in the coming weeks. No details were given regarding the possible start date for its construction.
Rheinmetall in March confirmed plans for the construction of a factory in Lithuania, a member of the European Union and NATO. A letter of intent was signed with the government in Vilnius in mid-April, before the Lithuanian parliament passed several bills to encourage investment in its defence.
Armin Papperger, the chief executive of the German company, celebrated the agreement in a statement. "It once again confirms our claim to be one of the pillars for providing national and international security," he said.
Rheinmetall is already active in Lithuania, operating a maintenance centre with defence company Krauss-Maffei Wegmann in the country since 2022. The facility maintains combat vehicles used by NATO combat units stationed in the region, as well as Leopard 2 battle tanks given by Germany to Ukraine.
The German military is also set to permanently station an armoured brigade in Lithuania.