In November 2023, the government approved the establishment of a state-owned company, State Defense Corporation Ltd. The Ministry of Defense manages all shares in the company.
The task of the State Corporation is to carry out comprehensive investment management in the national defense industry and to coordinate production-related processes. The project of the Latvian State Defense Corporation, together with companies from France, Italy, Finland, and Norway, was awarded a grant of €41 million from the European Commission's Munitions Support Fund. This is the third-largest grant in this category. Latvia is also the only Baltic country to have received funding from this fund.
The project will involve several activities in different countries, including one in Latvia to set up a modular powder charge production facility for artillery ammunition.
Defence Minister Andris Sprūds (Progressives) said: "The big goal here is that we reach a production capacity of two million of these 155 [millimeter] artillery shells in Europe next year. [...] In Latvia, we are talking about a smaller section, but I would not talk about the details here."
The primary objective is to provide ammunition for Latvia's own needs.
"We can talk about business models in the future. [...] There may be different types of business. First of all, our own defense capabilities, absolute support to Ukraine, and of course, if necessary, we are ready to be competitive globally," Sprūds said.
The grant agreement is expected to be signed in May when the details of the project can be revealed. The implementation period is set at three years. At present, it is envisaged that production could start in assembly plants in Latvia, Finland, and Italy.
The Defence Minister expressed the hope that the Latvian plant could start partial operations already at the end of this year.
