Lithuanian Economy and Innovation Minister Ausrine Armonaite signed an agreement with Rheinmetall, the German arms manufacturer, to build an ammunition plant in Lithuania, the ministry reported on June 3.
The news comes as the West seeks to ramp up its artillery production capacities to backfill Ukraine's needs on the battlefield and strengthen its own arsenals due to a potential Russian threat.
Lithuania and Rheinmetall signed a memorandum on building the arms plant in the country in April.
"Rheinmetall establishing operations in Lithuania is a significant step towards meeting our country's immediate defense and security needs," Armonaite said.
"It will help us to ensure uninterrupted access to essential weapons and ammunition, as the products that European defense needs will be produced on Lithuanian soil."
The project's investment is more than 180 million euros (around $195 million). The new plant is expected to create at least 150 new jobs, according to the minister.
The location of the facility, which is expected to produce tens of thousands of rounds of ammunition per year, should be announced in the upcoming weeks, the statement read.
The Lithuanian parliament, the Seimas, also approved several legal amendments drafted by the defense and environment ministries and the government office to help investors facilitate the development of large-scale projects.
The amendments simplify territorial planning, land procurement, and construction procedures to allow the launching of operations "in the shortest possible time" in the country.
In early May, Rheinmetall announced its plans to build new artillery plants in Unterluess, Germany, and in Lithuania.
Previously, the company said it would also build an artillery factory in Ukraine, along with facilities dedicated to the production of military vehicles, gunpowder, and anti-aircraft weapons.
During the Munich Security Conference in February, Rheinmetall CEO Armin Papperger signed a memorandum of intent with Ukraine's Strategic Industries Minister Alexander Kamyshin to produce artillery shells in another joint plant based in Ukraine.
Francis Farrell
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