German Parliament Approves $4.3 Purchase of Israel’s Arrow-3 Missile Defense Systems

The German Bundestag and Budget Committee agreed yesterday (Wednesday) to release advance payments of up to 560 million euros, the first step in procuring the Arrow-3 missile defense system, developed by Israel Aerospace Industries (IAI).

In total, Germany is expected to pay almost 4 billion euro (or $4.3 billion) for this system – an exo-atmospheric interceptor for long-range threats developed by Israel Aerospace Industries. According to Reuters, Germany hopes to strike a deal by the end of 2025, and receive the systems by the end of 2025.

Payment will be made possible via a special 100-billion-euro fund started by German Chancellor Olaf Scholtz following Russia’s war on Ukraine. Arrow-3 will be part of the European Sky Shield Initiative (ESSI), led by Germany.

The Arrow 3 interceptor is part of the Arrow Weapon System (AWS) – the first operational, national, stand-alone Anti Tactical Ballistic Missiles (ATBM) defense system which detects, tracks, intercepts and destroys incoming threats carrying a range of warheads. It has a range of 2,400 km, and can reach a 100-km altitude.

This interceptor is designed to intercept and destroy the newest, longer-range threats, especially those carrying weapons of mass destruction. It is Israel’s upper-tier defense system in its multi-layer defense array.

The other components include Iron Dome, which intercepts short-range, surface-to-surface rockets as the bottom layer; David’s Sling, which intercepts short-to-medium and medium-to-long-  range, surface-to-surface missiles as the middle layer; and the Arrow 2, which intercepts medium-to-long- range missiles as the upper layer, together with the Arrow 3.

Negotiations between Israel and Germany concerning Arrow 3 acquisition surfaced last year, after Russia launched the war on Ukraine. In September 2012 Israel’s then Prime Minister, Yair Lapid, met with German Chancellor Olaf Scholtz and confirmed negotiations. “The future possible deal as to do with our total commitment to the safety of Germany,” said Lapid.

In March of this year, Prime Minister Benjamin Netanyahu held a meeting with Scholtz in Berlin, during which they discussed the upcoming potential deal. The following month, Israeli officials confirmed that negotiations have accelerated.

The deal requires US approval, as it was developed using government funding. This approval had reportedly been  granted by President Biden in March of this year. No official announcement, though, has been made as of yet.

Defense Minister Yoav Gallant, the Israel Ministry of Defense and IAI issued a joint statement, in which they welcomed the German  approval of the commitment to initiate the necessary steps to acquire the sysetm.

"The professional teams led by the Director General of the IMOD, Maj. Gen. (Res.) Eyal Zamir, the DDR&D’s Israel Missile Defense Organization (IMDO) and Israel Aerospace Industries are continuing discussions with their German counterparts to finalize the procurement contract. Israel Ministry of Defense officials maintain ongoing communication with the American administration to ensure the necessary sales approval. The German commitment letter will be signed after the American administration grants approval for the sale," said the statement.

The Arrow 3 deal will be the biggest defense deal in Israel’s history. If the deal eventually falls through, though, Germany will lose part or all of its down payment, which will go to Israel for the work done thus far, according to Reuters.