The State will invest EUR 26 million in the development of a modular propellant charge plant

On Tuesday, 18 February 2025, the Cabinet of Ministers decided on several significant measures to promote the development of Latvia’s defence industry. In particular, the government approved the allocation of EUR 26 282 630 from the Ministry of Defence budget to be invested in the establishment of a modular propellant charge plant. The property “Ziemeļnieki” in Iecava parish, Bauska Municipality, where the plant is planned, was also granted the status of a national interest object.

Granting national interest object status will enable the infrastructure required for the establishment of a modular propellant charge assembly plant for artillery ammunition – i.e. the implementation of the project ROLLO – to be built more efficiently and within a defined timeframe. The designation of the property as a national interest object has been coordinated with the Bauska Municipality local government.

“This is a clear confirmation that we are acting in line with the established plan and moving forward with the development of Latvia’s defence industry. Granting national interest object status allows important projects that strengthen our country’s defence capabilities to be implemented more quickly. This plant will be a key element of our military industry ecosystem and will ensure a stable supply chain for strengthening the security of Latvia and Europe,” emphasises Minister of Defence Andris Sprūds.

The establishment of the plant in Latvia is an important step in ensuring supply for the National Armed Forces, as well as strengthening the common European defence system.

The ROLLO in Latvia is being implemented by “State Defence Corporation” Ltd. founded at the end of 2023, with the objective – following the decision made on 18 February – to establish a production facility by 2027 in cooperation with foreign partners. Its development is part of a project supported by the European Commission.

The ROLLO is implemented in accordance with the European Union regulation “The Act in Support of Ammunition Production” (grant agreement No. ASAP-2024-101172125-ROLLO), and its aim is to increase modular charge production capacity in Europe, thereby strengthening the collective defence capabilities of member states.

“State Defence Corporation” Ltd. has also received Government’s approval to apply, for the implementation of the ROLLO, the exemption from the Public Procurement Law set out in Section 3, Paragraph 8, for the procurement of raw materials required for the production of modular propellant charges, acquisition of production equipment, construction works, and related services. The Ministry of Defence notes that the application of this exemption is in line with Article 346 of the Treaty on the Functioning of the European Union, which allows Member States to take measures they consider necessary to protect their essential security interests related to the production or trade of arms, ammunition, and military equipment, provided that such measures do not adversely affect competition in the internal market for products not intended specifically for military purposes. The Ministry of Defence is making investments in the state-owned company to implement the project that will ensure the protection of essential national security interests.

In addition, to ensure the performance of new delegated state tasks, the implementation of the ROLLO, and the operation of the Corporation, the Ministry of Defence has received approval of the Government to increase funding by EUR 501 744 in 2025 for the provision of necessary personnel.

“State Defence Corporation” Ltd. is a 100% state-owned company, with its shares held by the Ministry of Defence. The company was established in November 2023 with the aim of developing the military industry in Latvia in the long term, managing investments in the defence sector, developing ammunition production capacity, and promoting international cooperation in the defence industry.

Source: Sargs.lv