Israeli defence companies Israel Shipyards and Rafael are close to finalising a deal worth approximately €150 million to supply Cyprus with naval vessels and weapons systems, according to a report by Israeli financial news outlet Calcalist.
The agreement is expected to be signed in the coming weeks, once final arrangements between the Israeli and Cypriot defence ministries have been completed, the report said.
Under the proposed deal, Israel Shipyards would supply vessels to the Cypriot Navy equipped with weapons systems manufactured by Rafael. The two companies have previously worked together on defence procurement programmes involving Cyprus and other countries.
Previous cooperation with Cyprus
According to Calcalist, Israel Shipyards delivered a patrol vessel to the Republic of Cyprus less than a decade ago to help protect the country's Exclusive Economic Zone (EEZ).
The vessel was equipped with radar, command-and-control systems and two Typhoon naval weapon systems.
The latest initiative is being pursued through a government-to-government (G2G) agreement, which the report said aims to further strengthen defence, diplomatic and economic relations between Israel and Cyprus.
The cooperation forms part of a broader partnership involving Greece, as the three countries continue to develop closer ties in the Eastern Mediterranean.
The reported deal comes amid continuing regional tensions and shifting geopolitical dynamics, which have placed increased emphasis on defence capabilities and security cooperation.
Cyprus already operates Israeli defence systems
The report also noted that Israel Aerospace Industries (IAI) has already supplied Cyprus with the Barak MX air and missile defence system.
The system was publicly presented during the military parade in Nicosia marking the 66th anniversary of the Republic of Cyprus's independence.
The reported naval agreement would represent a further development in Cyprus's defence procurement relationship with Israeli industry, extending cooperation into naval platforms and their associated weapons systems.
Potential for further defence cooperation
Sources in Israel's defence industry cited by Calcalist believe the agreement could pave the way for additional forms of cooperation in the future, including possible collaboration in defence manufacturing.
Such cooperation could broaden the relationship beyond equipment procurement, although no further arrangements have been confirmed.
Neither Rafael nor Israel Shipyards commented on the reported agreement.
