Germany’s Thyssenkrupp Marine Systems (TKAG.DE) will build three advanced submarines for the Israeli Navy in a deal worth 3 billion euros ($3.4 billion), the Israeli Defense Ministry said on Thursday.
The parties also signed an industrial strategic cooperation agreement that amounts to more than 850 million euros, the ministry said.
The first of the submarines, part of a new series called Dakar, will be delivered within nine years, the government said.
Israel’s Navy operates five German-built Dolphin-class submarines, with a sixth under construction in Germany. The three Dakar submarines will replace three of the ageing Dolphins.
“I would like to thank the German government for its assistance in advancing the agreement and for its commitment to Israel’s security,” said Defense Minister Benny Gantz.
“I am confident that the new submarines will upgrade the capabilities of the Israeli Navy and will contribute to Israel’s security superiority in the region.”
The agreement also includes the construction of a training simulator in Israel and the supply of spare parts.
“The Dakar class will be of a completely new design, which is to be specifically engineered to fulfil the operational requirements of the Israeli Navy,” Thyssenkrupp said.
The announcement comes only a few days before Israel’s cabinet is due to discuss forming a panel to investigate the decision-making process behind purchases of submarines and missile boats from Germany worth hundreds of millions of dollars.
Israeli prosecutors last year charged several Israelis, including a businessman, a former naval officer and a former cabinet minister, with bribery, money laundering and tax invasion in connection with deals from 2009 to 2016.
Thyssenkrupp has said an internal investigation found no evidence of corruption in its handling of the sales and Israeli authorities have taken no action against the conglomerate.