JERUSALEM — Germany is set to sign an expansion of its Arrow 3 interceptors and launchers deal with Israel by an additional $3.1 billion Thursday, the Israeli Defense Ministry said Wednesday.
The expansion will be added to the original deal from two years ago, in which Germany purchased Arrow 3 interceptors and launchers for about $3.5 billion, bringing Germany’s total purchases of the Israeli Arrow 3 defense systems to about $6.5 billion.
The Israeli Defense Ministry said the countries agreed in the additional deal 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.”
The overall roster of 103 new defense projects approved Wednesday by the Bundestag, Germany’s parliament, comes with a price tag of €83 billion, or $98 billion, per the Ministry of Defense in Berlin. An agency spokeswoman there declined to name the funding amount dedicated specifically to new Arrow 3 work, saying that information is deemed classified.
The announcement of the expansion of the Arrow 3 procurement comes amid geopolitical tension in Europe with the ongoing Russia-Ukraine war, and five days after Germany accused Russia of an air traffic control cyberattack.
Several senior German officials also warned in November about a potential confrontation with Russia in the next four years. The latest was German Foreign Minister Johann Wadephul, who said about three weeks ago that new intelligence assessments show Moscow is preparing for a possible attack against a NATO member.
The first Arrow 3 system was delivered to Germany on Dec. 3, the first time a foreign country has received independent access to those defense systems. More Arrow 3 systems are expected to be delivered and deployed in Germany in the coming months.
The initial and follow-on transfers include launch systems, ammunition and radar, in what was described as one of Germany’s first major procurement contracts since Russia invaded Ukraine in 2022, and as Israel’s largest defense export deal to date.
The Arrow 3 is being developed and produced in an Israeli-American cooperation, with the Israel Aerospace Industries serving as the prime contractor for the development and production of the aerial defense system.
The Arrow 3 interceptors operate against exoatmospheric missiles and intercept ballistic missiles in space. Its first operational interception was recorded Nov. 9, 2023, when it destroyed a Houthi ballistic missile launched toward Eilat. The Arrow 3 was also Israel’s main interceptor against Iranian ballistic missiles during the countries’ 12-day June war.
Tzally Greenberg is the Israel correspondent for Defense News. He has experience reporting on economic affairs as well as defense and cyber companies.
