France’s MBDA has apparently been selected to supply its VL-MICA surface-to-air missiles for the Egyptian Navy’s four new Meko A200 frigates, after a deal with Denel Dynamics for its Umkhonto missile fell through due to Denel’s inability to provide financial guarantees.
According to the Stockholm International Peace Research Institute’s (SIPRI’s) arms transfers database, Egypt in 2019 ordered 96 radar-guided Umkhonto-R missiles and 32 infrared-guided Umkhontos for its Meko A200 frigates it is acquiring from Germany’s ThyssenKrupp Marine Systems (TKMS).
The Umkhonto would have been a proven fit as the Meko A200 vessels in service with Algeria and South Africa are equipped with Umkhonto surface-to-air missiles. The Finnish Navy also uses the weapon on its Hamina fast attack craft and Hameenmaa class minelayers.
The deal was worth an initial R4.5 billion and Denel in 2019 had received an advance payment of R1.5 billion. However, late last year Egypt cancelled the contract after Denel was unable to provide guarantees for the contract due to its financial problems.
Defence expert and Director at Africa Defence Review Darren Oliver explained that “In most cases the client, in this case TKMS on behalf of the Egyptian Navy, first provides a portion of the contract value as an advance payment to pay for ramp up costs. In these cases the advance payment is essentially like a deposit, and manufactures like Denel are obliged to pay back most or all of it if they fail to deliver the contracted value. To ensure this happens, nearly every buying country insists on a bank guaranteeing the payment.
“Because of Denel’s precarious financial position, no local commercial bank is willing to provide any guarantees to it for advance payments, even for a relatively straightforward order like this. They’re too afraid it’ll be unable to deliver because of another cash crunch.”
As a result, France’s La Tribune reported this week that Egypt has replaced the Umkhonto with the VL-MICA, which the Egyptian Navy already uses on its Gowind class frigates. According to SIPRI, Egypt ordered 100 VL-MICA missiles in 2017 for the Gowind frigates.
The MICA fire-and-forget missile, capable of being fitted with either a heat-seeking homing head or with an active radar seeker head, has an interception range of up to 20 km.