Saab signs $1.04bn deal for new Swedish subs

Swedish defence and security group Saab said Tuesday it had signed contracts with Sweden's military for two submarines worth 8.6 billion kronor (933 million euros, $1.04 billion).

The order from the Swedish Defence Materiel Administration (FMV) covers the construction of two new Type A26 submarines, as well as a mid-life upgrade for two Gotland-class submarines.

Deliveries of the two new subs will take place in 2022 and 2024, Saab said in a statement.

The upgraded subs will be delivered in late 2018 and late 2019.

Saab said the A26 was a high-tech submarine with "long-endurance submerged performance and excellent manoeuvrability in all waters."

It will be "highly survivable thanks to modern underwater stealth technology and a unique heritage of shock resistant design."

The subs will be powered by conventional diesel-electric propulsion machinery and equipped with the Kockums Stirling Air-Independent Propulsion (AIP) system, making them difficult to detect.

In April, the Swedish government announced plans to raise defence spending by 10.2 billion kronor (1.09 billion euros, $1.18 billion) for 2016-2020, mostly to modernise ships to detect and intercept submarines, amid increasing Russian military activity in the Baltic Sea region.

Sweden is a non-NATO country with a longstanding tradition of military non-alliance.