The Ministry of National Defence and representatives of KNDS Deutschland, Rheinmetal Landsysteme and EPSO-G state-owned energy group international partners signed a Memorandum on industrial cooperation concerning constructions of Lithuania-based assembly and maintenance infrastructure for the Leopard 2 A8 main battle tanks. The project will be completed at a more efficient pace thanks to the major investment project statues granted by the Ministry of the Economy and Innovation.
25.1% of stocks of Lithuania Defense Services (LDS) owned by KNDS Deutschland and Rheinmetal Landsysteme are planned to be transferred to EPSO-G Invest. Parties prepare for agreement on cooperation terms in detail in 2026.
The Memorandum covers assembly of part of the tanks in Lithuania aiming for the shortest possible delivery terms and offer preconditions for capability development to the Lithuanian defence industry. In the wake of the agreement signature with the MoD, LDS will start building and assembly factory for the latest version of Leopard 2 A8. In its turn, Lithuania commits to contribute in developing the LSD manufacturing base and has signed an additional agreement on tank maintenance in combat-ready condition.
“This agreement is a milestone in strengthening Lithuania’s defensive capabilities. For the first time in history part of the cutting-edge equipment of NATO standard will be assembled in Lithuania, while the infrastructure developed in parallel will support its technical readiness in the long-term. This improves Lithuanian Armed Forces capabilities and facilitates growth of the Lithuanian defence industry,” said Minister of National Defence Robertas Kaunas.
According to Minister of Energy Žygimantas Vaičiūnas, energy and national security today are inseparable, while the planned investment is yet another crucial step in strengthening the ecosystem of the Lithuanian defence industry and national resilience.
“Our energy company EPSO-G Invest is currently on the very important 155 mm artillery ammunition project with other strategic companies, while the commitment made today marks yet another concrete step in expanding our capabilities. Attracted new projects create value not just in defence and economy but also energy: energy-consuming manufacturing supports development of renewable resources and energy independence,” said Minister of Energy Ž. Vaičiūnas.
LDS will be in charge not just of tank assembly in Lithuania but also for sustained maintenance, repair and servicing of the Leopard 2 A8 and other Lithuanian Armed Forces equipment. It is also expected that LSD will be able to ensure services to the German Brigade stationed in Lithuania in the future as well, and to extend that to a wider armored vehicle fleet from other countries.
“In our estimation, the first tank assembled in Lithuania should be released in early 2028, while the remaining will be manufactured as agreed in the Memorandum – by the end of 2030,” said chairman of the LDS board of directors Markus Schmidt.
The infrastructure required for company development is planned to be built in the Kaunas Free Economic Zone (FEZ). Lithuania Defense Services plans to invest approx. EUR 50 million in the project at the same time creating approx. 100 work positions.
This marks a milestone in the implementation of a strategic project of the Ministry of National Defence of local defence industry capability support by enabling military equipment assembly, manufacturing and long-term maintenance infrastructure development.
Collaboration with KNDS and Rheinmetall will help Lithuania attract advanced military technologies and enhance national resilience and defence potential.
Minister of the Economy and Innovation Edvinas Grikšas and KNDS Deutschland representatives Markus Helm and Markus Schmidt also signed a massive project investment agreement with Lithuania Defense Services. According to Minister, the contract provides clear-cut and favorable conditions to settle in sooner, kick off production and ensure smooth project development at Kaunas FEZ.
“The investment shows once again Lithuania as a reliable and strategically consequential point for significant defence industry projects. Ir strengthens our cooperation with the German leaders of defence industry and integrates Lithuania close in joint European projects. The signed contract gives a clear and secure start signal for production and consolidates the long-term perspective of the project in Lithuania,” said E. Grikšas.
In May 2024 Lithuania signed the Cooperative Procurement Arrangement (LEOPARD 2 CPA) initiated by the Federal Ministry of Defence. Alongside Germany, the Czech Republic and the Netherlands, Lithuania voiced an intent to acquire latest type of LEOPARD 2 A8 main battle tanks, driving practice tanks, combat support vehicles, and simulators for crew training. The agreement enabled adherence to preliminary contracts of Germany and to acquire standard combat equipment on the same terms as Germany was able to.
The LEOPARD 2 CPA follow-on contract on acquisition of the main battle tanks was signed in December 2024. The tanks were planned to be delivered in 2029-2034, however, the updated current contract includes industrial cooperation and sets the deadline to 2030.
Photo credit: SSgt. A. Čemerka / MoD
