Latvia and Ukraine to Build Joint Drone Factory on Russia's Doorstep

VIENNA — Latvian Prime Minister Andris Kulbergs announced on June 29, during an inspection of a local military base, that Latvia and Ukraine plan to establish a joint drone manufacturing facility in the eastern Latgale region — an area bordering both Russia and Belarus.

'Drone Deal' Takes Concrete Shape

The announcement marks the implementation of the so-called 'Drone Deal' signed by the two countries on June 9. The agreement was inked by Kulbergs and Ukrainian President Volodymyr Zelenskyy on the sidelines of the Nordic-Baltic Eight (NB8) summit in Tallinn — the first meeting between the two leaders. With this deal, Latvia became the sixth country to join Ukraine's bilateral drone cooperation framework.

Under the agreement, Ukraine will supply Latvia with attack drones, ground robotic systems, and maritime drone systems, while Latvia will provide Ukraine with domestically produced counter-drone systems. Ukrainian Defense Minister Mykhailo Fedorov and his Latvian counterpart Raivis Melnis confirmed the arrangement during a meeting in Kyiv on June 13, though specific details were not disclosed.

Revitalizing a Lagging Region — Construction to Begin This Year

Latgale has historically been one of Latvia's most economically underdeveloped regions. Kulbergs stated that the area is in urgent need of investment and employment, and that his government would make every effort to site the factory close to the Russian border. Construction is expected to commence within the year.

The exact location of the facility, the cost-sharing arrangement between Latvia and Ukraine, and the specific drone models to be produced have not been publicly disclosed.

Moscow's Sharp Reaction

Russia has long expressed strong displeasure at the role played by the Baltic states in Ukraine's drone warfare campaign, accusing the three small republics of opening their airspace to allow Ukrainian drones to transit en route to targets in Russia's Baltic region and the St. Petersburg area — more than 1,000 kilometers from Kyiv. Russian officials have gone further, claiming that the Baltic states have allowed Ukraine to launch drones from their territory. Russia's Foreign Intelligence Service (SVR), known for issuing unsubstantiated and inflammatory statements, published a press release earlier this year making precisely this allegation.

The announcement of a joint drone factory is almost certain to draw criticism from Moscow and will likely be framed as an escalatory move, potentially reinforcing Russian propaganda narratives that portray the Baltic states as 'particularly hostile' and 'particularly urgent' threats.

Border Counter-Drone Systems Coming Online

Beyond the joint factory, Kulbergs also announced that counter-drone systems will begin operating along Latvia's borders with Russia and Belarus starting in July–August of this year. He said the deployment would eliminate the need to scramble fighter jets every time a drone incursion occurs.

"When there is a drone threat, we won't have to send up aircraft every time — that is a very expensive and effective solution, but not the best or most cost-efficient option," Kulbergs said. A senior Latvian official had previously described a launcher-based system deployed along the border to Defense News.

A Politically Charged Announcement

The announcement comes against a highly sensitive political backdrop in Riga. On May 7, a Ukrainian drone that apparently went astray entered Latvian airspace from the direction of Russia and exploded at a fuel storage facility in Rēzekne, damaging four empty storage tanks. Within days of the incident, both the defense minister and Prime Minister Evika Siliņa resigned. Kulbergs subsequently assumed the role of prime minister.

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