Israel today signed a €3 billion ($3.4 billion) contract with German conglomerate ThyssenKrupp for the delivery of three submarines. These will be the most advanced submarines ever delivered to Israel and they will replace older submarines in Israel's fleet. Israel's Ministry of Defense has announced that this series of submarines will be called "Dakar," and the first of this new series will be delivered to Israel in 2031.
In the past Germany has financed Israel's submarine program by paying between 33% to 50% of the total sum. But with the German government will be financing the "Dakar" series with a more modest 20%, or €600 million. This amount is in line with the German government's original commitment of €600 million in 2017, when a memorandum of understanding (MoU) was signed about the procurement. But since then the price of the submarines has risen significantly but the German's have refused to raise the level of the subsidy.
The agreement was signed today at Ministry of Defense headquarters in Tel Aviv by Ministry of Defense director general General (res.) Amir Eshel and the Thyssenkrupp Marine Systems (TKMS) CEO Dr. Rolf Wirtz. The ceremony was kept low key and among the few senior figures in attendance was the Commander in Chief of the Israel Navy Vice Admiral David Saar Salama.
Israel's Defense Ministry said, "The agreement includes reciprocal procurement of more than €850 million including procurement from Israeli industry and Israel defense industries of hundreds of millions of euros, which will yield knowhow, open up markets overseas, professional training, jobs, and technological development for the Israeli economy and Ministry of Defense."
ThyseenKrupp has still not undertaken the full reciprocal procurement required by past deals including the sixth submarine, which is currently being built in Kiel as well as a deal to procure four warships to protect Israel's offshore gas rigs.
Israel's Minister of Defense Benny Gantz said, "Procuring three first-class operational submarines joins a range of measures that we have been promoting over the past year to equip and empower the IDF and its operational readiness for theater of war. I want to thank the German government for its assistance in moving forward with the deal and its support and commitment to Israel's security. I am certain that the new submarines will upgrade the Israel Navy's ability and assist in maintaining Israel's military supremacy in the region."
Published by Globes, Israel business news - en.globes.co.il - on January 20, 2022.
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