Germany’s Rheinmetall AG CEO Armin Papperger (L) and Romania’s Prime Minister Ilie Bolojan (R) shake hands during a press conference at the government headquarters in Bucharest, Romania, November 3, 2025. Photo: EPA/ROBERT GHEMENT

Romanian Prime Minister Ilie Bolojan announced on Monday that Rheinmetall plans to invest around 535 million euros in a facility producing ignition powders and modular charges in the town of Victoria, central Romania.

The government will contribute with a 120-million-euro loan under the EU’s SAFE mechanism (Security Action for Europe), aimed at boosting defence industrial capacity across the bloc.

Construction is due to begin in 2026 and will take about three years. Once it is operational, the plant is expected to employ 700 workers.

“Through this partnership, Romania is starting to emerge as a player with potential in the defence industry of Southeastern Europe,” Bolojan said after signing the agreement with Rheinmetall. “I am glad the company sees us as a serious and reliable partner.”

Rheinmetall’s Chief Executive, Armin Papperger, said the Victoria facility would be the most advanced plant of its kind in the world, producing double- and triple-base propellants used in artillery systems.

“These propellants are essential for supporting defence forces in Europe and beyond,” Papperger said. “We are building capacity for about 60,000 charges – or roughly 300,000 modular charges – one of the largest in the world.”

Rheinmetall already controls a majority stake in a factory in Mediaș in central Romania that produces military trucks, armoured personnel carriers and air defence systems. The company has also announced plans to set up a training and excellence centre in Romania to develop local industrial skills.

The deal comes as Rheinmetall steps up its presence in the Balkans, including recent projects in Bulgaria, all part of a broader European effort to boost ammunition production amid the continuing war in Ukraine.

In September, the EU detailed the allocation of its 150-billion-euro SAFE programme, designed to strengthen Europe’s defence base and collective security. Romania is expected to receive 16.7 billion euros, mainly for defence-related reindustrialisation projects.