U.S. Greenlights Arrow-3 Sale to Germany

Israel said it will sign its biggest ever defense export deal worth $3.5 billion with Germany for the Arrow 3 missile-defense system.

The sale was made possible after U.S. Department of State officials notified senior Israeli defense leaders of the approval. Senior officials from both countries will now sign a “letter of commitment.”

United States’ approval is necessary because the Arrow is a co-development between Missile Defense Agency (MDA) and the Israel Missile Defense Organization, led by local contractor Israel Aerospace Industries (IAI).

The budget committee in the lower house of German parliament approved an initial payment of $600 million in June. The initial payment is intended to set up manufacturing and production in Israel.

The long-range Arrow 3 system, designed by Israel Aerospace Industries (IAI) to shoot down missiles above the Earth’s atmosphere, is claimed to be powerful enough to offer protective cover for neighboring European Union states.

The money will come from a landmark €100 billion fund unveiled by Chancellor Olaf Scholz to bolster the country’s defenses in the wake of Russia’s invasion of Ukraine.

Berlin aims to strike a deal with Israel on Arrow-3 purchase by the end of the year, according to procurement documents by the finance ministry that were prepared for parliament. It expects the Arrow 3 system to be delivered in the final quarter of 2025.