Denel, a state-owned South African defence company, is proceeding with a R2 billion ($105 million) contract to modernize G6 self-propelled howitzers for an undisclosed Middle Eastern customer.
Denel recently briefed Parliament’s Standing Committee on Appropriations (SCOA) on the project’s status on 5 August 2026. The company told lawmakers it has completed the first upgraded vehicle and expects to finalize the project baseline in December. The briefing was first reported by DefenceWeb, Military Africa reported.
The contract runs across two phases. The first covers work in South Africa: modifying a lead vehicle, running technical evaluations, training operators and maintenance crews, and designing a dedicated upgrade facility for construction in the customer’s home country. That facility is due for delivery in March 2027.
Phase two moves the work overseas. It covers commissioning the new facility, upgrading and servicing the guns, delivering the modernized howitzers, and providing training and interim support. Denel expects to hand over the first battery of upgraded G6s in June 2028, a second battery in June 2029, and a third in June 2030. The full programme is scheduled to run for five years.
The upgrade package touches most of the vehicle’s core systems. It includes overhauls to hydraulics, electrical systems and air conditioning, a new powerpack, and an upgraded fire control suite covering gun laying, navigation and control software. The contract also bundles in integrated logistic support, testing, evaluation and integration work. Denel told SCOA that insufficient working capital could disrupt daily project activity. The problem centers on a R350 million prepayment that the company cannot currently draw on, because the contract’s guarantee issuer holds it as collateral.
To free up the funds, Denel is negotiating an alternative financing arrangement that would move the prepayment into an escrow account, accessible only under strict project conditions. The Export Credit Insurance Corporation of South Africa (ECIC) would provide an insurance policy to back the arrangement. “Internal approvals are already in place, allowing re-engagement”, Denel said, adding that it is waiting on outcomes from both the ECIC and the local financial institution handling the transaction.
The G6, a 6×6 wheeled self-propelled howitzer built around Denel’s 155 mm ordnance, entered service with the South African Army in the late 1980s. At introduction, it was regarded as one of the most mobile self-propelled guns in the world, with a road speed of 85 km/h and a cross-country speed of 30 km/h. The design has since been sold to the United Arab Emirates (78 delivered) and Oman (24 delivered), and 43 have been built for South Africa’s Army.
Denel SOC Ltd is the largest manufacturer of defence equipment in South Africa and operates in the military aerospace and landward defence environment. Denel SOC Ltd was incorporated as a company in 1992 in terms of the South African Companies Act (No 62 of 1973), Denel’s sole shareholder is the South African Government.
The Minister for Public Enterprises appoints an independent Board of Directors that oversees the executive management team which is responsible for the day-to-day management of the company.
Denel is an important defence contractor in its domestic market and a key supplier to the South African National Defence Force (SANDF), both as original equipment manufacturer (OEM) and for the overhaul, maintenance, repair, refurbishment and upgrade of equipment in the SANDFs arsenal. (DefenceWeb; Military Africa; File Photo: A G6 self-propelled howitzer during a South African Army exercise © Denel)
