Germany awards ICEYE, Rheinmetall almost $2B for new SAR satellite network

WASHINGTON — The German Ministry of Defence has awarded a €1.7 billion ($1.99 billion) contract to Finnish firm ICEYE and German defense behemoth Rheinmetall for development of a new synthetic aperture radar (SAR) satellite constellation, Rheinmetall announced today.

The contract represents one of the first major muscle movements to follow the MoD’s September move to slate €35 billion ($41 billion) for space security.

“Modern armed forces depend on access to and control of space-based reconnaissance, communications, and mission control,” said Rheinmetall CEO Armin Papperger.

Papperger’s ICEYE counterpart, Rafal Modrzewski echoed: “Space-based intelligence is the foundational layer of modern defense, but it is no longer just a strategic backdrop — it is a tactical instrument.”

The two firms in November set up a partnership to create a joint venture, called Rheinmetall ICEYE Space Solutions, based in Neuss, Germany. Under the contract, the new entity “will provide a high volume of SAR images via its exclusive constellation, offering a comprehensive service solution that includes full operations, ground station management, and AI-driven image evaluation.”

The new contract runs from the end of 2025 to the end of 2030 with options to extend, according to the press release. Production of the first satellite is scheduled to begin in the third quarter of 2026.

The firms will own and operate the low Earth orbit constellation, called SAR Space System for Persistent Operational Tracking Stage 1, or SPOCK 1. Imagery will be provided to the German military primarily for use “to protect the German Armed Forces’ ‘Lithuania Brigade’ and secure NATO’s eastern flank,” the release said.

The Lithuania Brigade is the nickname for the Bundewehr’s 45th Armoured Brigade, stood up in April and deployed in Lithuania to deter Russian aggression. The “heavy maneuver” formation will comprise some 4,800 personnel once fully operational, according to the MoD. It will be the first German military unit that large to be permanently based outside the country since World War II.

Germany currently operates the aging SAR-Lupe constellation, developed by OHB-System. The five satellites were launched between 2006 and 2008. The firm in 2023 launched two follow-on birds, called SARah, but they were moribund until a recovery maneuver to deploy their jammed antennas this spring brought them into service, according to a May 27 report by market analysis firm Seradata.

Data from SAR-Lupe is shared with France, in exchange for optical imagery from the French MoD’s Helios II birds. It is unclear at the moment whether that will be the case for SPOCK-1 data.

For ICEYE, the German deal is the latest in a handful of high-profile sales to European militaries as the continent moves out on a collective effort to establish “strategic autonomy” in from the United States in the space domain.

In May, the company announced a deal worth approximately €200 million to provide an initial batch of three SAR-sats to the Polish Armed Forces, with an option for three more over the next 12 months. Under the program, called MikroSAR, ICEYE “will also partner with local industry to provide the Polish Armed Forces with a mobile Intelligence, Surveillance and Reconnaissance (ISR) platform that provides near real-time tasking, data downloads, and analysis,” according to the announcement.

On June 23, ICEYE announced it won a €158 million award to provide the Royal Netherlands Air Force with “a full suite of ISR solutions … including four 25cm resolution SAR satellites, a local ground segment and antenna, and a mobile ground segment featuring an autonomous, AI-driven imagery intelligence hub.” The contract also includes provision of satellite data from ICEYE’s existing constellation.

ICEYE inked another deal in September, worth about €158 million, with the Finnish Defence Forces for an undisclosed number of SAR-sats. “This figure includes the main procurement as well as options to extend the satellites’ lifecycle and expand the system in the future,” according to a company press release.

Most recently, on Dec. 2, ICEYE announced a deal, with an undisclosed value, to sell a satellite to the Portuguese Air Force — “the first time the Portuguese Air Force will directly acquire a satellite, representing a significant milestone in Portugal’s national ISR [intelligenced, surveillance and reconnaissance] defense capabilities from space.” The company earlier in June also inked an agreement with CTI Aeroespacial, a Portuguese technology and innovation center, for one satellite that will then provided to the air force, the announcement explained.