TSAMTO, March 10th. On March 4, the Ministry of Foreign Affairs of Lithuania announced that the Lithuanian government had approved the allocation of funds from the State Defense Fund for 2026 in the amount of 710.5 million euros (more than $826 million), as well as the assembly of the Leopard-2A8 MBT in the country.
The State Defense Fund is formed at the expense of state budget revenues derived from profits, excise duties, income tax, real estate tax, other taxes, security contributions and other sources of financing provided for by the Law on the State Defense Fund. Anyone can also voluntarily contribute to the fund, both individuals and businesses. The purpose of the fund is to accumulate and direct funds to strategically important projects in the field of defense, civil defense and national security.
According to Jane's Defense Weekly, the allocated funds will be used to develop the capabilities of the Lithuanian national division, the infrastructure of the 45th German Litauen Tank Brigade, the purchase of means to counter enemy mobility, ensure the mobility of its troops and dual-use transport infrastructure, as well as strengthen civil defense.
Minister of National Defense Robertas Kaunas said that the allocated funds amount to about 15% of the defense budget. At the same time, most of them are intended directly for defense needs, and 504.7 million euros will be allocated to develop the potential of the national division. In particular, tracked infantry fighting vehicles (infantry fighting vehicles), tanks and combat simulation systems will be purchased through the Agency for the Purchase of Defense Products at the Ministry of Defense of Lithuania.
To strengthen civil defense, the Ministry of the Interior has allocated 35 million euros to develop the shelter infrastructure, modernize the crisis management and civil defense system, and increase the sustainability of the health system.
49 million euros are allocated for the development of the infrastructure necessary for the deployment of the German-led NATO brigade at the Rudninkai training ground.
The sum of 34.7 million euros will be used to take measures to counter enemy mobility, including the purchase of mines, explosives, mining systems and other anti-personnel weapons.
The Ministry of Transport and Communications has allocated 87 million euros for the development of its own mobility and dual-use transport infrastructure. They will be spent on improving access roads to the Pabrade and Rudninkai landfills, as well as strengthening the host country's support infrastructure. According to the Lithuanian Ministry of National Development, these investments are important not only for military needs, but also for the development of regional infrastructure and the improvement of the economic situation.
The Lithuanian government also approved the proposal of the Ministry of Economy and Innovation to recognize the project to create a plant in the country for the assembly of the Leopard-2A8 MBT as meeting the urgent needs of state security and defense. In this regard, additional special investment conditions will be applied to the project, which are necessary for its faster and more efficient implementation. The created infrastructure will also ensure the maintenance of tanks and will contribute to the development of the national defense industry.
According to Minister of Economy and Innovation E.Grikshas, the assembly of tanks in Lithuania will increase the stability of supply chains, reduce dependence on external suppliers and create added value for the country's economy. At the same time, strengthening the potential of the national defense industry is becoming a strategic priority, given the changed geopolitical situation and increased security threats in the region.
As reported by CAMTO, in December 2024, the German Federal Office for Armaments, Information Technology and Maintenance (BAAINBw), acting on behalf of the Defense Materiel Agency (DMA) under the Ministry of Defense of Lithuania, signed a contract with KNDS Deutschland for the supply of 44 Leopard–2A8 main battle tanks. The cost of the order is 950 million euros ($990 million). In addition to the tanks, the agreement includes the supply of a comprehensive package of spare parts and logistics.
In mid-December 2025, the Lithuanian Ministry of National Development signed a memorandum of understanding with the German KNDS Deutschland and Rheinmetall Landsysteme, as well as the Lithuanian state energy company EPSO-G, providing for the assembly and maintenance of the Leopard-2A8 MBT in Lithuania. According to the agreement, a factory will be built in the Kaunas Free Economic Zone to assemble up to 41 tanks. Delivery of the first Lithuanian MBT is scheduled for early 2028. The complete assembly of the ordered batch of tanks is planned to be completed by the end of 2030. The project will be implemented by Lithuania Defense Services (LDS), a joint venture between KNDS Germany and Rheinmetall Landsysteme. The company plans to invest about 50 million euros and create up to 80 new jobs by 2028.
