Lithuania and Estonia Secure €29.5M for Drone Warhead Production
Lithuania’s RSI Europe and Estonia’s Odin Defence have been selected for €29.5 million in EU funding to expand drone warhead and explosive component manufacturing through the RagnaRasa project.
Lithuanian defense technology company RSI Europe and Estonia-based Odin Defence have been selected to receive €29.5 million in European Union funding to expand manufacturing capacity for drone warheads and explosive components under a joint industrial project known as RagnaRasa.
The project will establish a cross-border production chain, with essential components manufactured in Estonia and final assembly, testing and qualification carried out in Lithuania.
The companies announced their participation on October 16, with additional details reported on October 19, 2026. The funding comes through the Industrial Reinforcement Actions (IRA) component of the European Defence Industry Programme (EDIP).
RagnaRasa is one of eight projects selected from 83 proposals submitted by companies across 23 EU member states and Norway.
Drone Warhead Production Across Two Baltic Countries
Under the planned industrial arrangement, Odin Defence will establish manufacturing operations at Estonia's Ermistu Defence Industry Park, while RSI Europe will handle subsequent production stages in Lithuania.
The initiative focuses specifically on warheads and explosive components for loitering munitions, a category of weapons that includes one-way attack drones.
According to the European Commission's project allocation, RagnaRasa has been assigned €29,500,811 in EU funding.
The project combines RSI Europe's experience in unmanned systems and military electronics with Odin Defence's expertise in energetic materials and explosive manufacturing.
Tomas Milašauskas, CEO and co-founder of RSI Europe, said the project would link component manufacturing in Estonia with final assembly and qualification in Lithuania, strengthening the regional defense industrial base.
The companies have not disclosed a confirmed annual production target, construction timetable or date for the first completed warheads.
RSI Europe Expands Its Defense Manufacturing Activities
Headquartered in Lithuania, RSI Europe develops FPV drone systems, remote-initiation technology and warheads. The company also operates in Germany, Poland and Ukraine.
Its activities include manufacturing military unmanned systems and providing training and technical support for Ukrainian and allied armed forces.
Odin Defence, established by British military engineering specialist Lee Thornhill, is developing manufacturing operations in Estonia. Its involvement in the Ermistu industrial park provides a location for the production activities planned under RagnaRasa.
The cooperation is intended to connect specialized manufacturing capabilities in two Baltic countries rather than concentrate the entire production process at a single facility.
Part of €168 Million EU Defense Manufacturing Initiative
The European Commission announced the selection of eight industrial projects on October 14, allocating a combined €168.2 million to expand production of energetic materials and components used in missiles, drones and ammunition.
The Commission expects the supported projects to leverage approximately €1.26 billion in industrial investment across 17 production sites in 14 EU member states and Norway.
Collectively, the projects are intended to support annual production capacity exceeding 200,000 loitering munition warheads, alongside additional ammunition, energetic materials and propulsion systems.
Those targets apply to the broader group of funded projects and are not individual production commitments by RSI Europe or Odin Defence.
RagnaRasa's selection establishes a funding basis for the proposed industrial expansion. The companies have not announced that the new facilities are operational or that production under the project has begun.
