Bulgaria is accelerating the implementation of a strategic project with German defence contractor Rheinmetall. Sofia expects to complete construction of the new facility within 30 months and secure full technology transfer. The project is intended to expand ammunition production in Bulgaria and strengthen the country’s role in European defence supply chains amid rising military spending and growing demand for ammunition across Europe.

 

Deputy Prime Minister and Minister of Economy, Investments and Industry Alexander Poulev said after a series of talks with representatives of the German company that Bulgaria expects to establish the new Rheinmetall facility within the next 30 months. The plant is expected to become one of the key elements in the modernization of the country’s defence industry.

“Sofia intends to safeguard its national interests primarily through full technology transfer, which should be used not only within the joint project but also for the further development of Bulgaria’s defence industry”, Alexander Poulev said.

The project was officially launched by Bulgaria and Rheinmetall in October 2025. The joint venture was established by the German company and Bulgaria’s state-owned arms manufacturer VMZ-Sopot. Rheinmetall holds a 51% stake in the venture, while VMZ owns 49%. The total investment is estimated at around €1 billion, while the production complex is expected to cover approximately 100 hectares.

The initial concept envisages the production of artillery shells, energetic materials and modular charge systems, including 155mm ammunition. Rheinmetall previously announced that the project could create around 1,000 jobs, with production initially expected to begin in 2027.

However, the implementation of the project encountered a number of practical challenges in 2026. Bulgarian authorities said that the sites previously considered lacked the necessary infrastructure for a major gunpowder production facility, particularly sufficient electricity and water supply capacity. According to Poulev, building the required infrastructure from scratch could take years, while Sofia intends to complete the project within 30 months. As a result, the final location of the facility remains subject to further negotiations and assessments.

Sofia views cooperation with Rheinmetall as an instrument for restoring and modernizing Bulgaria’s national defence industry, as well as an opportunity to integrate Bulgarian companies into European defence production chains. The Bulgarian government has explicitly linked the development of the defence industry to strengthening the defence capabilities of both the European Union and NATO.

Prime Minister Rossen Jeliazkov has previously stated that cooperation with Rheinmetall should contribute to technology transfer, improve the competitiveness of Bulgarian industry and strengthen the country’s role as a Black Sea state.

The production of 155mm artillery ammunition is of particular importance. Since the beginning of Russia’s full-scale war against Ukraine, this segment has become one of the most constrained areas of Europe’s defence-industrial capacity. European countries are simultaneously increasing their ammunition stockpiles and seeking to reduce their dependence on external suppliers.

In this context, Bulgaria has an opportunity to build on the existing expertise of VMZ-Sopot while integrating the technologies and production standards of one of Europe’s largest defence contractors. If successfully implemented, the project could allow Bulgaria to play a more significant role in the pan-European ammunition production chain.

At the same time, Sofia seeks to gain more than simply additional production capacity from its cooperation with Rheinmetall. Poulev has emphasized the need for full technology transfer, which would allow Bulgaria to use the acquired technologies for the development of its own defence projects. This issue is therefore becoming one of the key conditions for further expanding bilateral cooperation.

The project also fits into the broader European effort to increase defence spending. Bulgarian authorities have previously linked cooperation with Rheinmetall to European initiatives aimed at strengthening defence capabilities, including the SAFE instrument designed to finance joint defence projects among European countries.

It should be noted that increasing domestic ammunition production in Bulgaria, which is located on NATO’s eastern flank and is also a Black Sea state, could potentially strengthen the resilience of regional supply chains and reduce dependence on transporting products from more distant European production centres.

 

Thus, Sofia’s cooperation with Rheinmetall is gradually evolving from an individual investment initiative into part of a broader restructuring of Europe’s defence industry. Bulgaria is seeking to modernize its domestic military industry, attract German technology and capital, and secure a more significant position within the defence production chains of the EU and NATO.

In broader strategic terms, the project points to a potential shift in Bulgaria’s role — from primarily being a consumer of Western weapons to becoming a producer of components for the European defence system. This is particularly important for a country that is simultaneously modernizing its armed forces, acquiring F-16 Block 70 fighter jets, Stryker armoured vehicles and new multi-purpose combat vessels, while seeking to increase its contribution to NATO’s collective defence.

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05.10.2026 02:47