The German Bundestag has approved an expansion of the Arrow 3 defense system contract with Israel valued at approximately $3.1 billion, the Israeli Ministry of Defense’s spokesperson said in a statement on Wednesday.
The expansion will complement the initial purchase agreement signed by Israel and Germany approximately two years ago, valued at roughly $3.5 billion.
Together, the two agreements total approximately $6.5 billion, representing by far the largest-ever Israeli defense export deal.
The Arrow 3 air-defense system, which is designed to intercept ballistic missiles outside the Earth’s atmosphere with exceptional long-range interception capabilities, has made hundreds of successful interceptions since the outbreak of war between Israel, Hezbollah and Iran in October 2023.
Defense Ministry Director General Maj. Gen. (res.) Amir Baram said in a statement that 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.
“The agreement will reinforce Israel’s position as a global security leader, accelerate Arrow production for the Israel Defense Forces, and channel billions into strengthening our defense industrial base and advancing next-generation air defense capabilities.”
Defense Minister Israel Katz also commended the agreement.
He was quoted as saying: “The Bundestag’s approval of the Arrow 3 contract expansion is a clear expression of Germany’s profound confidence in Israel, our technological capabilities, and our shared commitment to protecting our citizens against escalating threats. The revenues from this deal will enable continued advanced strategic developments, strengthen the IDF’s force posture, and ensure Israel’s qualitative edge in the years ahead against our adversaries.”
The contract, signed by Israel’s Ministry of Defense and the German Federal Ministry of Defense, is expected to be cemented on Thursday in Germany, led by Moshe Patel, the director of the Israel Missile Defense Organization within the ministry’s Directorate of Defense Research and Development; and Annette Lehnigk-Emden, the director general of the German Federal Office of Bundeswehr Equipment, Information Technology and In-Service Support, with participation from representatives of Israel Aerospace Industries.
On Dec. 3, Israel Defense Ministry officials handed over the first operational Arrow 3 system to the German Army at a ceremony at an air force base near Berlin.
It marked the first delivery under the defense agreement signed more than two years ago.
Israel’s new budgeting strategy encourages weapons sales with other countries as a financing solution for its own arms industry—instead of using funds from the treasury, Hebrew financial outlet Calcalist recently reported.
The Jewish state intends to significantly expand in the coming years the volume of defense transactions conducted through intergovernmental agreements, with 21 arms deals forged in the past year on the basis of this model, according to Calcalist.
