Defence Industry
Bahrain set its sights on developing a domestic defence industry quite recently. The first product of the Bahraini defence industry was the Faisal 4x4 APC built in 2019 by Bahrain Defence Forces engineers.
According to the Minister of Interior Shaikh Rashid bin Abdulla Al Khalifa the local authorities hope to expand the country’s production of home-made equipment. The new vehicle has the full support of HH Nasser bin Hamad Al Khalifa commander of the Bahrain Defence Force Royal Guard, and since July 2020 Secretary General of the Supreme Defence Council.
According to HH Nasser bin Hamad Al Khalifa, the Government will encourage this industry, will encourage the investors from the private sector of the country, put the right structure for this industry and see role in defence production.
Furthermore, HH Nasser bin Hamad Al Khalifa said that the private sector has expressed its readiness enthusiasm and seriousness to invest in the sector of the defence industry, which will open a new era for the defence production in Bahrain.
According to HH Nasser bin Hamad Al Khalifa, the Government wants initially to find the necessary and most appropriate mechanism and thereafter find the best and most suitable partners.
On the 15th of November 2021, Bahrain Defence Force and Tawazun Economic Council (Tawazun) signed a Memorandum of Understanding (MoU) to boost cooperation in defence industries and to exchange information and expertise on industrial participation and OFFSET programs. The two sides will cooperate to identify opportunities for joint projects in the supply chain domains as well as cooperation in Research and Development (R&D) areas.
Regarding OFFSET programs Bahrain recently announced its new policy. The new policy covers defence procurements valued at more that USD7 Million with a requirement for 60% of the contract value to be discharged by the supplier. Companies that already have an existing OFFSET agreement with the Armed Forces of Bahrain will also be required to fulfill an OFFSET agreement on any supply contracts valued at under USD7 Million.
The broad aim of the Bahrain Defence Forces Economic Program cover the development of the Defence and Security Industry in the Kingdom of Bahrain but also to enable projects in other sectors including: aerospace, communications and information communication technology, infrastructure food and water security and sustainability.
Dual use technologies such as AI robotics, quantum computing, and virtual reality will also be considered. Credits for OFFSET projects can be achieved through three methods: a) investment, b) contractual engagement, and c) capability development.
Through several investment routes supplier companies can invest in a Bahrain located company with at least one local partner or create a partnership with a Bahraini firm. It is important to mention that investment and contractual engagement programs are required to be completed within 7 years of contract signature while capability development programs need to be completed within 3 years.