(Bloomberg) -- Bulgaria approved the purchase of eight Lockheed Martin F-16 fighter jets for $1.25 billion, a crucial part of the Balkan country's biggest defense overhaul since the Cold War.
The contract to buy the new F-16 Block 70 aircraft is part of the government's effort to replace outdated Soviet-era equipment. Bulgaria and other eastern European countries are revamping their armies to meet NATO standards after Russia's annexation of Crimea from Ukraine and criticism from U.S. President Donald Trump that they weren't spending enough on defense.
The government gave a mandate to ministers to sign four contracts for fighters, equipment, ammunition and surveillance systems, which may be approved by parliament next week, Defense Minister Krasimir Karakachanov told reporters Wednesday in Sofia.
The decision “fulfills a years-old dream of the Bulgarian air force, placing it at an equal level with our partners in the alliance,” General Andrey Botsev, Chief of Defense, told reporters.
The price exceeds an initial cap of 1.8 billion lev ($1 billion) approved by parliament and will raise Bulgaria's defense spending from about 1.5% of its economic output last year. The government may propose a revision to this year's budget to fund the deal, Deputy Finance Minister Rositsa Velkova said last month. The Finance Ministry sold 300 million lev in bonds on the domestic market in June to fund the deal.
Without the option of a deferred payment, it may delay the country's other army modernization projects: a warship purchase worth 1-billion lev and armored vehicles worth 1.5 billion lev,Karakachanov said earlier last month.
To contact the reporter on this story: Slav Okov in Sofia at sokov@bloomberg.net
To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net, Michael Winfrey, Andrea Dudik
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