Elbit Systems Ltd. (TASE:ESLT; Nasdaq: ESLT) was awarded a $410M framework contract to supply up to seven Watchkeeper X tactical unmanned aircraft systems to the Romanian Ministry of Defence. The Israeli company will shift portions of the system’s production, testing, and maintenance to Romanian defence enterprises under the five-year agreement, as part of broader government measures to restructure the country’s defence industry.

Romania, which shares a 650-kilometer border with Ukraine, hosts a US ballistic missile defence system and has a permanent alliance battlegroup stationed on its territory as of this year. The Eastern European nation, a NATO member since 2004, plans to increase defence expenditure to 2.5% of GDP in 2023, up from 2% currently, as a result of Russia’s invasion of Ukraine.

The Watchkeeper X systems are designed for surveillance, intelligence gathering, reconnaissance, and target acquisition.

The Watchkeeper X UAS is an Elbit Systems UK subsidiary and the UK export version of the British Army of the Hermes UAS family. Watchkeeper X’s NATO compatibility provides interoperability with NATO and its allies.

Bezalel Machlis, the CEO and president of Elbit Systems commented, “This contract demonstrates the sustained demand for Elbit Systems’ UAS. We look forward to further strengthening Elbit Systems’ relationship with the Romanian Government. As part of the contract execution, Elbit Systems plans to establish infrastructure and industrial cooperation with U-TacS, Aerostar and Elbit Systems’ subsidiaries in Romania to produce the UAS in Romania. We also appreciate the continued support and collaboration with the Israeli and UK governments and our business partners on the Watchkeeper program.”