Israel, Germany sign $3.1 billion contract expansion for Arrow air defence system

Israel and Germany signed a contract worth around $3.1 billion to expand the Arrow-3 air and missile defence system manufactured by Israel Aerospace Industries, Israel's defence ministry said on Thursday.

Germany first purchased the Arrow system in 2023, as it sees Russia's intermediate-range missiles as the primary threat to its population and critical infrastructure.

"Combined, the two agreements total approximately $6.7 billion, representing the largest defence export deal in Israel’s history," the ministry said.

Germany in December became the first European nation to deploy the Arrow air defence system, built to intercept intermediate-range ballistic missiles such as Russia's Oreshnik, as it seeks to counter what it views as a growing threat from Moscow.

The system, developed by IAI in cooperation with the U.S. Missile Defence Agency, is used as the upper layer of Israel's missile defences, together with the Iron Dome, which takes out short-range threats.