If Rheinmetall establishes factories in Latvia and Lithuania, large-caliber ammunition production could also come to Estonia, said Minister of Defense Hanno Pevkur (Reform) and Minister of Economic Affairs and Industry Erkki Keldo (Reform).

The ministers said the specific company does not have to be Rheinmetall.

"Among the bidders for the defense industry park, we also have producers of large-caliber ammunition," Pevkur told ERR. "We hope to sign contracts with these producers in the near future, and then Estonia will have it as well."

He added that more public details will follow once contracts are finalized.

For Pevkur, all producers are equal. He noted that contracts in Latvia and Lithuania include buy-back obligations and state investment commitments, while Estonia plans for incoming investors to make their own investments without taxpayer funds.

Keldo said attracting multiple defense companies to the region benefits everyone. "I believe the defense industry park being built under the leadership of the Ministry of Defense is also a very good example of how positive announcements about defense industry investments will soon reach Estonia as well," he said.

He added that the government has worked to remove bureaucratic obstacles. The defense industry park was designed specifically to give companies certainty for local investment, and the Defense Ministry has invested heavily in infrastructure to support large-scale production of large-caliber ammunition.

The industry minister said explosives handling regulations were updated to reduce technical hurdles and bring safety requirements in line with modern standards.

He also noted a state initiative for the construction of an explosives factory, which the state hopes will be operated by a strategic investor in the future.

The government is ready to help fast-track investments but will not create obstacles, he emphasized, adding that the Estonian Business and Innovation Agency (EIS) is likewise working to attract defense companies to Estonia.

According to Keldo, the two ministries have put together a broad defense industry value proposition, including funding opportunities, technology sales to assist Ukraine, and support through defense industry parks.

He also noted ongoing engagement with international companies, including Saab, as well as companies offering dual-use technologies. "In that sense, work has been underway," the minister confirmed.

On Thursday, a Latvian state-owned company signed a memorandum of understanding with German arms maker Rheinmetall to build a €275 million artillery ammunition factory producing 155 mm shells. Rheinmetall is also setting up an ammunition plant in Lithuania, which will also mainly produce 155 mm shells.

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