Bulgaria Seals €1 Billion Defense Deal with Rheinmetall, Paving Way for New Munitions Hub
Sofia — Bulgaria is set to become a major regional producer of artillery ammunition after signing a landmark €1 billion joint-venture agreement with German defense giant Rheinmetall. The deal, finalized in Sofia, marks one of the largest industrial defense investments in the country’s modern history and comes amid heightened demand for NATO-standard munitions across Europe.
Under the agreement, Rheinmetall will hold a controlling 51% stake in the newly created company, with Bulgaria’s state-owned arms manufacturer VMZ Sopot owning the remaining 49%. The partnership will oversee the construction and operation of a new production complex dedicated to gunpowder and 155-millimetre artillery shells, a calibre widely used in NATO operations and by Ukraine.
The investment is expected to generate around 1,000 new jobs, a significant boost for Bulgaria’s defense sector, which has been struggling to modernize after decades of underinvestment. The new factory is projected to begin production in stages, with firm commitments to supply both domestic and international markets. Rheinmetall has emphasized that the facility will be integrated into its wider European supply chain, allowing Bulgaria to play a “strategic and long-term role” in ammunition manufacturing.
For Bulgaria, the agreement goes beyond industrial expansion. Officials describe it as a strategic pivot toward deeper alignment with European defense infrastructure at a time when ammunition shortages continue to challenge EU members supporting Ukraine. The government has framed the deal as part of a broader effort to strengthen the country’s security profile while attracting high-skill manufacturing to rural regions.
The announcement follows months of negotiations and comes amid renewed pressure on European allies to ramp up production of artillery shells due to ongoing conflicts and depleted stockpiles. With this project, Bulgaria positions itself as a rising contributor to Europe’s defense readiness—transitioning from a legacy producer of Soviet-standard ammunition to a key supplier of NATO-grade munitions.
Industry analysts note that the €1 billion scale of the project underscores both soaring demand and Bulgaria’s growing attractiveness as a manufacturing base. As construction begins, the new plant is expected to solidify Bulgaria’s place on Europe’s defense map while supporting Rheinmetall’s expanding global footprint.
