Albania and Italy have signed a major agreement to jointly produce military vessels, not only for Albania’s armed forces but also for allied countries.
The deal was signed between the Albanian state-owned defense company Kayo and Italian shipbuilding giant Fincantieri, one of Europe’s largest naval and commercial shipbuilders.
New Shipyard in Pashaliman
The partnership will establish a new joint company to build warships in Pashaliman Base, located in southern Albania. The project is expected to employ around 400 people and transform the shipyard into a key asset for the Albanian Navy in Vlora.
The facility will focus on constructing and maintaining vessels up to 80 meters in length and 800 tons in capacity.
According to Albania’s Ministry of Defense, Kayo will provide the shipyard and invest in infrastructure modernization, while Fincantieri will contribute expertise, training, materials, and advanced technology. The total investment is estimated at €1.2 billion.
Strategic and Historical Importance
Pashaliman, situated in the Bay of Vlora, is Albania’s most important naval base. During the Cold War, it served as a key Mediterranean base for the Soviet Union. Today, it operates under the Albanian Navy with support from international partners.
Political and Strategic Impact
The signing ceremony was attended by Prime Minister Edi Rama, Defense Minister Ermal Nufi, and Italy’s ambassador to Tirana, Marco Alberti.
Rama described the agreement as a major step for Albania’s security and economy, emphasizing that the country—being a member of NATO—must adapt to evolving geopolitical realities.
He noted that Albania will initially benefit from the construction of two ships for its armed forces, increasing its fleet, with future production aimed at export markets.
Defense Minister Nufi added that the partnership positions Albania as a new European hub for Fincantieri in the production of small and medium-sized vessels, with over 90% of clients expected to be international.
Broader Defense Expansion
Earlier in April, the Albanian government authorized Kayo to engage in the production and trade of military drones and both military and civilian vessels, signaling a broader push to develop the country’s defense industry.
Meanwhile, the U.S. Embassy in Tirana recently highlighted Albania’s potential to become a NATO logistics hub in the region during a visit by Matthew Whitaker.
