The key facts

  • Negotiations on a deal worth ~€150 million between Israel Shipyards, Rafael and Cyprus are at an advanced stage (according to Calcalist).
  • The deal is being arranged through a G2G format; signing is expected in the coming weeks after the defense ministries agree on the terms.
  • Israel has previously supplied Cyprus with a patrol boat and, according to the newspaper, the Barak MX air defense system; in August, Israel and Greece signed an agreement on the 'Achilles Shield' program worth €3 billion.

A €150 million deal at an advanced stage

Negotiations on a deal worth about €150 million between the Israeli defense companies Israel Shipyards and Rafael and the Republic of Cyprus are at an advanced stage, reports the Israeli financial newspaper Calcalist. The deal concerns the supply of naval vessels equipped with modern weapons systems. The agreement is expected to be signed in the coming weeks after the defense ministries of Israel and Cyprus finalize the terms.

Structure of the agreement and background of cooperation

Under the plan, Israel Shipyards is responsible for supplying the vessels, which will receive weapons systems produced by Rafael. The agreement is advancing within an intergovernmental cooperation format (G2G), which gives the initiative an institutional and strategic character. The cooperation between the parties does not start from scratch: less than ten years ago, Israel Shipyards already supplied Cyprus with a patrol boat for guarding the exclusive economic zone, equipped with a radar, command and control systems, and two Typhoon naval combat modules. The companies have also jointly worked on programs with Azerbaijan and the Philippines.

The broader context of defense ties

The maritime agreement is part of a broader process of strengthening defense and diplomatic ties between Israel and Cyprus. According to Calcalist, Israel Aerospace Industries (IAI) supplied Cyprus with the Barak MX air and missile defense system; the system was publicly displayed at a military parade in Nicosia in early October as part of events marking the 66th anniversary of the independence of the Republic of Cyprus. Israel has not officially confirmed the agreement. The newspaper notes that the rapprochement is taking place against the backdrop of regional contradictions, tensions with Turkey, and the consequences of the protracted conflict in the Middle East.

The Israel–Cyprus–Greece axis and possible continuation

The defense rapprochement between Israel and Cyprus is linked to Israel's broader strategic cooperation with Greece: in August, the countries signed an agreement worth €3 billion on the 'Achilles Shield' program, aimed at creating a multi-layered Greek air defense system using Rafael and IAI systems. Israeli defense sources cited by Calcalist believe the Cypriot deal could open the way to further commercial partnerships, including in the field of defense industrial production. Rafael and Israel Shipyards did not comment on the publication or the forthcoming agreement.