Israel is set to sign a letter of commitment for its largest-ever single defense contract on Thursday, moving forward with selling $3.5 billion worth of the Arrow 3 air defense system to Germany.
Defense Minister Yoav Gallant will fly to Berlin for a two-day visit on Wednesday night in order to ink the deal for the Defense Ministry, which developed the system in cooperation with the United States. The US gave its blessing to the sale in August.
While in Berlin, Gallant will also meet with his German counterpart, Boris Pistorius, who is hosting the Israeli defense delegation. The two will issue a joint declaration on cooperation between the respective defense establishments.
The deal not only sets a high-water mark for Israeli defense sales and German efforts to beef up defense capabilities amid Russia’s ongoing invasion of Ukraine, but also carries symbolic overtones, with the Jewish state selling defensive systems to a nation that less than a century ago turned its military might toward Jewish extermination.
The sale also would also make Germany the second country, after the US, to obtain the Arrow from Israel, a decision that a Defense Ministry official called significant.
Arrow 3 is considered to be one of the most advanced air defense systems of its kind, crafted to intercept ballistic missiles while they pass through space, beyond Earth’s atmosphere. The system is designed to destroy projectiles and their nuclear, biological, chemical or conventional warheads close to their launch sites, from a distance of up to 2,400 kilometers (1,490 miles). It is Israel’s topmost layer of air defense, complementing the shorter-range David Sling and Iron Dome systems.
In August, the US also approved a planned Israel €316 million sale to Finland of the David’s Sling system, which is designed to intercept ballistic missiles, cruise missiles, aircraft, and drones.
The Arrow technology was jointly developed and produced by the Israel Missile Defense Organization, a branch of the Defense Ministry’s Defense Research and Development Directorate, and the US Missile Defense Agency. The system is primarily manufactured by the state-owned Israel Aerospace Industries.
Selling the system in Germany points to the high degree of trust between Jerusalem and Berlin, and highlights their close defense ties, an Israeli Defense Ministry official said.
Furthermore, the acquisition by Germany is expected to give NATO access to Arrow 3, as the system is expected to be interoperable with the Europe’s most prominent strategic alliance. The move is significant, as the European Union — 22 of whose 27 members are NATO signatories — leads global aid to war-torn Ukraine, and several countries are separately casting their own wary eyes toward thwarting further Russian territorial ambitions.
The German government has led a push to bolster NATO’s air defenses in Europe after seeing Russia’s relentless missile strikes on Ukraine, urging allies to buy deterrence systems together. More than a dozen European countries have so far signed up to the so-called European Sky Shield initiative.
On Thursday, Gallant and Pistorius will sign a letter of commitment, triggering an initial German payment of about $600 million to prepare production before the full contract is signed.
Professional ministry staff will sign a second, technical document, alongside the ministers.
The full $3.5 billion contract, according to the Defense Ministry, would be signed by the end of 2023, once final approvals from both parliaments are obtained. Berlin expects the Arrow 3 system to be delivered in the final quarter of 2025.
Accompanying Gallant as part of the Israeli delegation are Defense Ministry Director General Eyal Zamir, Directorate for Defense R&D head Dani Gold, and Missile Defense Organization head Moshe Patel. At the signing ceremony, Gallant will also be joined by the CEO and chairman of Israel Aerospace Industries.
Emanuel Fabian contributed to this report.