By Barbara Erling
WARSAW (Reuters) -Poland said on Wednesday it had chosen Sweden's Saab to supply it with three submarines, in a multi-billion-dollar deal that forms a key element of Warsaw's efforts to bolster its defences in the Baltic Sea.
Warsaw has been ramping up investments in the armed forces to counter what it sees as a growing threat from Russia after Moscow's 2022 invasion of Ukraine.
The deal with Sweden under the "Orka" programme to boost Poland's military exemplifies Warsaw's efforts to build a Baltic Sea alliance within the European Union, as its traditional Central European alliance loses significance due to divisions over Russia and approaches towards the EU.
"Sweden presented the best offer in terms of all criteria, delivery time, and operational capability, especially in the Baltic Sea," Deputy Prime Minister Wladyslaw Kosiniak-Kamysz told a press conference.
He estimated the value of the deal at around 10 billion zlotys ($2.73 billion), and said Sweden had committed to buy some armaments from Poland as part of a wider cooperation agreement, and to provide a "gap-filler" submarine for the Polish army to train on.
Saab, which makes a wide range of military equipment including fighter jets, surveillance systems, missiles and submarines, will supply Poland with its A26 submarines.
Kosiniak-Kamysz said he would like the commercial deal concluded no later than the second quarter of 2026 and he expected the first delivery in 2030.
HEIGHTENED BALTIC SEA SECURITY CONCERNS
The Baltic region is on heightened alert following a string of cases of suspicious damage to underwater infrastructure since 2022, but authorities have been unable to find sufficient proof of deliberate malicious intent to press charges.
The Swedish submarines are designed to deal with seabed warfare and could help NATO surveil and prevent attacks. Sweden's government said that Russian aggression made it more important than ever to have an expanded defence cooperation in the Baltic Sea.
"This deal creates a common system for underwater operations in the Baltic Sea and strengthens interoperability between the Swedish and Polish navies," Defence Minister Pal Jonson said in a statement.
The submarines would feature equipment from Britain and the three countries together would be a strong force in the Baltic Sea region, the statement said.
SAAB SHARES RISE ON CONTRACT NEWS
Saab shares rose following the news and were up 2.6% at 1616 GMT.
The company signed a memorandum of understanding on defence collaboration with Polish armaments group PGZ in September.
Warsaw had also received offers from Germany, Italy, France, Spain and South Korea. Britain had lent its support to the Swedish bid.
($1 = 3.6571 zlotys)
(Reporting by Barbara Erling, Anna Wlodarczak-Semczuk, Pawel Florkiewicz, Alan Charlish and Anna Koper, Additional reporting by Louise Breusch Rasmussen and Johan Ahlander in Stockholm; Editing by Ros Russell)
