EU awards €29.5M to Lithuania, Estonia for drone warhead production

Lithuanian defense company RSI Europe and Estonia-based Odin Defence have secured €29.5 million ($33.1 million) in EU funding for RagnaRasa, a joint project to manufacture warheads and explosives for loitering munitions.

The European Commission announced the selection on October 14, 2026, as part of €168.2 million ($188.8 million) in funding awarded to eight projects under the European Defence Industry Programme (EDIP). The two companies confirmed their selection on October 16.

RagnaRasa among largest EU defense production awards

According to the commission’s results factsheet, RagnaRasa received the third-largest award, just below the €30 million ceiling per project.

The project is one of three selected to increase production of loitering munition warheads. Across all eight projects, the commission expects annual output of more than 200,000 such warheads from 2027.

Explosives production in Estonia, assembly in Lithuania

RagnaRasa will link explosives and component manufacturing in Estonia with final assembly, testing and qualification in Lithuania, according to RSI Europe.

“RagnaRasa is the next step in building our industrial capacity and regional defense capability,” said Tomas Milašauskas, CEO and co-founder of RSI Europe.

The Lithuanian company manufactures FPV drones, remote initiation technologies and warheads. In May 2026, it announced the delivery of 9,500 Shpak FPV systems to an undisclosed NATO buyer.

Odin Defence to establish production at Ermistu

Odin Defence will establish its production facility at Estonia’s Ermistu defense industrial park in Pärnu County.

The Estonian Center for Defense Investments (ECDI) signed an agreement with Odin Defence in March 2026, identifying it as a subsidiary of UK-based Thor Industries Ltd specializing in plastic explosives.

Production at Ermistu is expected to begin in 2027. Estonia is investing more than €50 million ($56.1 million) in infrastructure for the industrial park, which will also host a short-range air defense missile production facility operated by Frankenburg Technologies.

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