Brazil has agreed interest rates with Sweden in a financial deal for its Gripen NG acquisition, allowing the contract to proceed to the next stage and seek final approval from the Senate.

Under a $5.4bn contract with Saab, the Brazilian Air Force (Fab) is purchasing 36 Gripen NG fighters, including 28 single-seat and eight two-seat jets, as well as related systems and equipment.

With the completion of negotiations between the countries, the Swedish Defence and Security Export Agency FXM will finance the contract by charging an annual interest rate of 2.19% on the loan.

Brazil defence minister Jaques Wagner said: "We have agreed on the interest rate from the date of contract signature.

"This is a success for both countries and consolidates our strategic partnership."

Under the contract awarded in October 2014, Saab is expected to deliver the first aircraft in 2019, while the deliveries are scheduled to be completed in 2024.

"This is a success for both countries and consolidates our strategic partnership."

The first 15 aircraft will be manufactured in Brazil, whereas the remaining 21 will be jointly produced by Brazilian and Swedish engineers.

The Gripen NG features the same design and technology as the combat proven JAS 39 Gripen and is scheduled to initially replace FAB’s Mirage 2000C fighters, followed by the F-5EM and A-1M aircraft.

The aircraft offers more thrust, extended range and endurance, and is fitted with new sensors, including an active electronically scanned array radar, highly effective electronic warfare systems and multi-function communications.

In April, Saab signed a $245m contract with the Brazilian Ministry of Defence (MoD) to supply weapons for the country’s Gripen NG aircraft.

Image: Saab’s Gripen NG aircraft. Photo: courtesy of Bthebest.