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The Cabinet provides over 1.3 billion leva for joint military plants with Rheinmetall The government is investing over 1.3 billion leva (667 million euros) in the implementation of future military plants, which will be built jointly with the German Rheinmetall. Around 796 million leva (407 million euros) are earmarked for the capitalization of the future joint venture with VMZ. In addition, over 508 million leva (260 million euros) are earmarked for the state-owned Iganovo, which will design and build the gunpowder and 155-mm ammunition plants. The updated medium-term budget forecast for 2026-2028 outlines the amount of the public commitment to the project at almost 2 billion leva (1 billion euros). The same amounts were also earmarked in the previous draft budget. Construction of the plant is due to begin in February next year. The main financial resource is directed to the joint venture, which will be established through VMZ EAD (a subsidiary of DKK EAD) and the German concern Rheinmetall. An estimated amount of 796 million leva (407 million euros) has been set aside for this purpose. This huge capitalization is intended to cover key investments necessary to launch high-tech production. It is recorded that the goals of the capital increase are “investments in equipment, plans, a know-how package, personnel training and others in the defense industry.” The funds represent a significant part of the Bulgarian participation (49%) in the company with a total declared value of almost 2 billion leva, as the funds are needed to guarantee the technical and expert level of the future gunpowder and 155-mm ammunition factory. In parallel with the financing of the strategic production partnership, funds have also been pledged for the entirely state-owned company Iganovo EAD - over 508 million leva (260 million euros). Against this capitalization, it is written that it will make "investments in creating a production enterprise in the military industry sector, which will operate exclusively within the framework of national and international regulations and only after obtaining all necessary permits and licenses." Iganovo EAD is tasked with building the factories. In November, the government allocated the first 718 thousand leva for the start-up phase - providing facilities and materials for the preparation of construction. The initial capital of 50 thousand BGN, provided upon incorporation, was intended for registration and initial activities.

 

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