The Brazilian Air Force is a step closer to securing 36 Saab Gripen NG fighter aircraft with the federal senate approving a renegotiated financing agreement with Sweden this week that lowers the interest rate on the $4.6 billion loan from 2.54% to 2.19%.

Brazil’sministry of defence said in a statement the senate authorised the loan of $4.6 billion for the fighter jets form Sweden's export credit agency SEK at the lower interest rate, and another $245 million for weaponry.

The lower rate was announced by the Brazilian government last week after extensive negotiations with Sweden amid a budget crisis, and the senate’s blessing formalises the deal.

The funds finance the procurement of aircraft, logistic support and armaments for the air force’s F-X2 project, which in 2013 selected the Saab Gripen NG over the American Boeing F/A-18 Super Hornet and French Dassault Rafale.


Brazil Ministry of Defense

The MOD made no changes to the delivery schedule in its announcement, saying the “first aircraft will be delivered in 2019 and the last in 2024”.

The Saab Gripen deal was signed in October 2014 and involves a considerable amount of technology transfer to Brazil over the next 10 years as well as substantial local industrial participation, with Embraer as the main benefactor.

Of the 36 aircraft, 28 are single-seat versions being produced in Sweden and eight twin-seat versions will be developed and produced by Brazil. The Gripen NG adds an active electronically scanned array radar and General Electric F414G power plant.

Under the terms of the agreement, Brazil will pay back the loan over 25 years with an eight-year grace period. The deal was threatened by wide-ranging budget cuts that have already seen several defence programmes cancelled and the Embraer KC-390 tanker-transport project delayed by two years.