KUWAIT — Australian defence technology company Electro Optic Systems (EOS) has signed a £370 million (approximately A$700 million) contract to supply a nationwide counter-drone defence system to Kuwait. The agreement is the largest in EOS's history, with the company serving as prime contractor and systems integrator.
Confirmed by the UK government on October 9, the contract will be delivered through MARSS Systems Limited, an EOS company, as part of the UK's Taskforce Sabre initiative supporting Gulf states.
AI-Powered NiDAR System and Counter-Drone Weapons
The defence network will be built around NiDAR, an artificial intelligence-enabled command-and-control platform acquired through EOS's purchase of MARSS, completed on May 21, 2026. The system is designed to detect and counter airborne drones and coastal seaborne threats through a cellular, nationwide network.
The deployment will integrate third-party electro-optical sensors, radar and sonar to detect threats at medium and long ranges. Data will be sent to central command centres, where NiDAR will combine sensor inputs to generate actionable threat assessments. The contract also includes an initial supply of third-party soft-kill jammers, which disrupt electronic links, and hard-kill interceptors designed to physically engage targets.
Financial Guarantees and Export Approvals
Work cannot begin until EOS fulfils the remaining financial and export conditions. The company must secure a £74 million bank guarantee, triggering an advance payment of the same amount from Kuwait. It must also obtain the required export licences for system components within two months of receiving the necessary customer documentation.
EOS provided a separate £37 million performance bond on August 12, 2026, equivalent to 10% of the contract value. It is backed by a £40.3 million cash security deposit held at a commercial bank.
EOS is working to meet the outstanding conditions but said there is no absolute assurance about whether or when they will be fulfilled. If the company fails to meet the requirements, including obtaining export licences, Kuwait can terminate the contract or appoint a third party to complete the work at EOS's expense.
The agreement includes a five-year warranty starting from the customer's formal acceptance of the system, termination rights, and capped and uncapped damages for breaches, delays or failure to perform.
Revenue, Cash Flow and Workforce Expansion
EOS expects to earn more than 80% of the contract's total revenue within the first 12 to 24 months after the agreement becomes unconditional. The remaining approximately 20% relates to support services over four years.
The company expects the project to be profitable over its lifecycle, although the initial deployment will require substantial working capital. Cash flow is forecast to turn positive by mid-2027.
EOS completed a capital raise in May 2026 to support the upfront MARSS acquisition payment, contract expansion and greater balance-sheet flexibility. The company also requires certain consents and additional accommodation from WHSP and other guarantee facility providers to finalise the required performance bonds and guarantees.
EOS is recruiting additional personnel to expand its existing MARSS workforce and will deploy a dedicated team to Kuwait to manage implementation and identify further regional sales opportunities.
The UK government said the agreement will create 100 new UK jobs in skilled engineering and manufacturing, with production based in Bristol. The company acknowledged support from both the UK and Australian governments in securing the contract.
The project's implementation remains dependent on EOS meeting the outstanding financial and export-licensing conditions.
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