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Justin Hendry

DroneShield signs NATO procurement agreement

Australian defence technology company Droneshield has signed the first ever counter-drone procurement agreement with NATO, opening the door to new contracts with nations from the military alliance in years to come.

Shares in the ASX-listed company that develops non-lethal and non-kinetic countermeasure devices for drones soared almost 20 per cent following the announcement on Wednesday morning.

The initial three-year counter-small unmanned aerial system (UAS) procurement framework agreement with the NATO Support and Procurement Agency (NSPA) is the first in NATO’s 75-year history, DroneShield said.

Image: DroneShield

NSPA brings together all of NATO’s logistics support and procurement activities to deliver a “broad spectrum of integrated capabilities for the alliance, its member nations and partners”, according to NATO.

NATO is assisting Ukraine in the Russia-Ukraine war, in which drones have been used heavily on both sides. Some analysts have claimed the use of drones in the conflict has fundamentally changed warfare.

In a statement, DroneShield chief executive Oleg Vornik described the procurement agreement as “one of the most strategically noteworthy agreements since the company was founded” in 2014.

While the company said the “exact order amounts cannot be estimated at this time”, contracts are expected to be signed in the first three years of the agreement, initially with European nations.

By simply being on the NSPA framework, the company also said that “additional end-users are likely to place orders with Droneshield”. Major non-NATO allies include Israel, Japan and South Korea.

“DroneShield is well positioned for the potential order volume with the new production facilities and production ramp-up announced earlier this year,” Mr Vornik said in a statement to the ASX.

The agreement has been signed with COBBS BELUX BV, Dronesheid’s partner in Belgium and Luxembourg. Mr Vornik said the company has “undertaken significant investment” to grow its network of in-country partners over the last decade.

DroneShield’s share price was trading at $1.13 at the time of publication, up from $0.74 at the start of the month and $0.37 at the start of this year.

The company was awarded a $59,000 grant in the last round of the the federal government’s Defence Global Competitiveness and Sovereign Industrial Capability Priority grant programs on Tuesday.

It also picked up a $890,000 contract with Defence last month for the development of “a suite of software tools to facilitate a range of test missions for DroneShield’s recently released software-defined jammer, DroneSentryX Mk2”.

DroneShield has previously sold products to both the Australian Army and the Department of Defense (DoD) in the United States. Its largest contract with the DoD was for $33 million last year.

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