Biggest defence deal at $3.5 billion

Israel gets okay to sell Arrow 3 to Germany

Gallant hailed the advancement of the sale, saying the US approval was "an expression of confidence in the excellent capabilities of Israel's defence industries".

An image of Israel and the US' test launch of the Arrow 3 missile defence system in 2019. Photo Israel Defence Ministry
An image of Israel and the US' test launch of the Arrow 3 missile defence system in 2019. Photo Israel Defence Ministry

(TIMES OF ISRAEL, AGENCIES) – The United States government last week approved Israel’s request to export the co-developed Arrow 3 missile defence system to Germany, in what will be Israel’s largest-ever single defence deal.

In a statement, the Defence Ministry said the US Department of State notified Defence Minister Yoav Gallant and other senior ministry officials that the US government had approved the sale of the system, which had been developed jointly by the Israel Missile Defence Organisation and the United States Missile Defence Agency and manufactured by Israel Aerospace Industries.

The Arrow 3 is currently Israel’s most advanced long-range missile defence system, meant to intercept ballistic missiles while they are still outside of the Earth’s atmosphere, taking out projectiles and their nuclear, biological, chemical or conventional warheads closer to their launch sites, from a distance of up to 2400 kilometres.

The Defence Ministry said senior Israeli and German defence officials would sign a letter of commitment in the coming weeks and Germany would transfer to Israel an initial payment of some $US600 million to set up manufacturing and production before the full contract is signed.

The full contract of $US3.5 billion ($A5.5 billion), according to the 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.

Germany, seeking to bolster defences amid Russia’s invasion of Ukraine, has sought to purchase the Arrow 3 system from Israel for more than a year now. The deal also came up in a meeting in April between Prime Minister Benjamin Netanyahu and German Chancellor Olaf Scholz.

Gallant hailed the advancement of the sale, saying the US approval was “an expression of confidence in the excellent capabilities of Israel’s defence industries”.

“This is a significant decision, which will contribute to Israel’s force build-up and economy. It is also particularly meaningful to every Jewish person that Germany is acquiring Israeli defence capabilities,” Gallant said in remarks published by his office. “Arrow 3 is a groundbreaking system, the most advanced of its kind in the world, as well as a force multiplier in Israel’s air defence, soon in Europe as well.

“Our cooperation with the US government is essential to the system’s development process and to the achievement of this significant agreement. This reflects once again the powerful defence ties between the US and Israel,” he said.

The director general of the Defence Ministry, Brig. Gen. (res.) Eyal Zamir, said the “landmark deal, the largest defence export agreement in our country’s history, will propel Israeli defence exports to a new record”.

The German government has led a push to bolster NATO’s air defences 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.

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