Working Group on Defence and Security Industry Development starts work

Today, the first meeting was attended by a working group led by the Ministry of Finance, which will coordinate strategic defence industry projects developed in the country and prepare decisions for the establishment of a state-controlled defence industry holding. During the first meeting, the working group reviewed large defence industry investment projects developed by the private sector that require state involvement as well as other cooperation agreements concluded or planned by state institutions on defence industry development.

"The main task of this working group is to see the picture of large and state-necessary defence industry projects in terms of national security and to identify priority projects for which state capital and involvement are expedient. This working group will allow the state to move from individual initiatives to the systemic development of the sector, escorting these projects from the first contact with the investor to the realisation of production," Minister of Finance Kristupas Vaitiekūnas states.

The creation of the Working Group on Defence and Security Industry Development is a first step in the implementation of paragraph 322 of the Government Programme, which provides for the establishment of a state-controlled defence industry company, the holding company. The newly established holding will consolidate public investment, enable more efficient management of large defence industry projects and ensure coordinated State involvement in attracting private investors to strategic capabilities.

"In order to enable large-scale investments, the State must act as an active partner in strategically important projects, capable of making quick and effective decisions. This working group and the holding company being set up will ensure that such projects will not get stuck due to a lack of coordination or decisions", Minister of Finance Kristupas Vaitiekūnas notes.

The working group led by the Ministry of Finance consists of representatives of the Ministry of the Economy and Innovation, the Ministry of National Defence, the Ministry of Foreign Affairs, the Ministry of Energy, the Ministry of Transport and Communications, the Office of the Government, Giraitės ginkluotės gamykla AB, the Defence Resources Agency, EPSO-G UAB and PI Invest Lithuania.

The working group will analyse and coordinate defence industry investment projects in which the state or companies controlled by it would be partners in the establishment of joint-capital legal entities, contribute to the implementation of industrial cooperation agreements, when armaments suppliers in Lithuania develop production capacities for technology, equipment or components, prepare a defence industry holding business model - economic feasibility, governance structure, investment policy and operational plan.

Defence industry investment projects are particularly important for Lithuania's security, as they will ensure the domestic production of ammunition, strengthen supply chains and develop the competences needed for Lithuania to become a reliable partner in international defence supply chains.

Currently, in large projects, the State is represented by EPSO-G UAB through its subsidiary EPSO-G Invest, which is 49 % owned by Valstybės investicinis kapitalas UAB under the Ministry of Finance. EPSO-G UAB is currently implementing a 155 mm artillery ammunition plant project together with Rheinmetall. By 2028-2029, these investments are expected to be taken over by the company(ies) managed by the Ministry of Finance, which requires a long-term and specialised governance mechanism for the defence industry, the holding.