Ukraine launches joint venture with German arms maker Rheinmetall, PM announces

Ukraine has set up a joint defence venture with German arms manufacturer Rheinmetall AG to service and repair Western weapons sent to help Kyiv against Russia's full-scale invasion, officials said on Tuesday.

Announced by Ukrainian Prime Minister Denys Shmyhal at a German-Ukrainian Business Forum in Berlin, the venture will also help with the local production of some key equipment made by Rheinmetall AG, he said.

It will bring "cooperation between our countries to a qualitatively new level and will allow us to build together the arsenal of the free world," Shmyhal told the forum.

Ukraine relies heavily on financial and military support from the West which has poured in tens of billions of dollars of weapons since Russia launched its full-scale invasion in February 2022.

Oleksander Kamyshyn, minister for strategic industries, said Ukraine was committed to launching the production of Western weapons locally to keep up with growing Ukrainian demand with the war now at the 20-month mark with no end in sight.

He said he met 25 major German defence producers in Berlin.

Rheinmetall said in a statement it owned a 51% stake in the venture that would operate on Ukrainian territory. "The first project will be repairing of German equipment, tanks, heavy armoured vehicles, Panzerhaubitzers and other German equipment," Shmyhal told reporters in Berlin.

"All other production projects - it's not public information, but we have some plans what to produce in Ukraine, but the companies will announce it by themselves when the time will come."

Ukrainian officials hope cooperation with Western arms producers can help revive a domestic arms industry plagued by inefficiency and lack of transparency for years before Russia's invasion in February 2022.

Kyiv also wants to try to reduce its reliance on Western aid, create an additional boost for the economy and speed up ammunition supplies to the front to support its counteroffensive against a bigger Russian army.

Ukraine launched the counteroffensive in early June to try to recapture territory occupied by Russia but five months in its troops face a fierce Russian attack on the eastern front line near Avdiivka in Donetsk region and Kupiansk in Kharkiv region.

Germany, an important wartime ally of Ukraine, is preparing a new 1.4 billion euro ($1.48 billion) "winter aid package" including air defence equipment to protect the Ukrainian energy sector, ports and other civilian infrastructure, Shmyhal also said.

Budget planning for 2024 assumes the war will continue into next year, Shmyhal said, adding that about 42 billion euros in Western aid would be needed to cover the wartime budget deficit.

From January to September this year the government spent about $27 billion or about 60 per cent of its total budget to finance its defence and security sector, official data showed.

($1 = 0.9438 euro)