In 2018, Latvian government plans to invest €234 million in defence procurement. Most of the funding will be spent on acquisition of military vehicles, ammunition, weapons and personal equipment.
28% of funding available for procurement of equipment will be invested in military vehicles, 15% will be used to purchase ammunition, 13% will be spent on weapons and 8% - on personal equipment.
2018 defence procurement funding consists of long-term liabilities under the existing procurement contracts and funding for purchase of equipment under contracts which will be signed this year. 70% of allocated funding will be spent on implementation of existing contracts.
Personal equipment is one of this year’s priority acquisitions and focus will be on equipping the professional soldiers of the Latvian army and the National Guard. €28 million will be spent to complete contracts signed in recent years and €12 million are allocated for new personal equipment purchase contracts concluded this year.
One of the largest multi-annual contracts for delivery of anti-tank rockets was signed on 12 February 2018. Multi-annual contracts for supply of light and medium tactical vehicles and medium rotorcrafts will also be signed this year. Multi-annual contracts for supply of light and medium tactical vehicles are the biggest procurements of such equipment in the history of Latvia’s defence sector. Procurement was launched in 2017 and has now reached the bidder selection stage.
Several other large-scale procurement projects will also be launched in 2018, including acquisition of military drones. Contracts for purchase of six-wheel military vehicles (ATVs) will be crucial in promoting the mobility of the National Armed Forces.
This year’s allocation for centralised defence procurement spending is 46% higher compared to 2017.
In addition, Ministry of Defence plans to invest €50 million into development of military infrastructure over 2018-2021 to upgrade its capacity as host nation and improve the infrastructure of National Guard through development of training grounds and shooting ranges.
Defence spending will amount to €576.34 million in 2018, which is a €126.8 million increase compared to 2017.
2018 defence budget will have three main lines: investment (43%), maintenance (24%) and personnel costs (33%).
Most part of the 2018 defence spending will go into capability defence projects like infrastructure development, air control and defence capabilities, further mechanisation of Land Force Mechanized Infantry Brigade, upgrading of combat and response capabilities of National Armed Forces and the National Guard.
Procurements will be designed in a manner allowing local companies take part in the supply and delivery of equipment. This will promote the security of supply, ability to tackle mobility tasks and ensure supplies to National Armed Force in a case of war.