The Federal Senate of Brazil has approved the $4.6bn financing agreement between Brazil and Sweden for its Gripen NG acquisition, allowing the Brazilian Air Force (Fab) to proceed with the contract.

Recently, Brazil’s Defence Minister Jaques Wagner announced that both the countries had agreed on interest rates in a financial deal to support the aircraft acquisition programme.

Under this deal, Swedish Defence and Security Export Agency FXM will fund the contract by charging an annual interest rate of 2.19%on the loan.

The current interest rate, which was lowered from 2.54% agreed last year, is a result of continuous negotiations between the countries. Brazil will repay the loan within the next 25 years.

"The FAB awarded a $5.4bn contract to Saab for the delivery of 36 Gripen NG fighters, including 28 single-seat and eight two-seat jets, as well as related systems and equipment."

The FAB awarded a $5.4bn contract to Saab for the delivery of 36 Gripen NG fighters, including 28 single-seat and eight two-seat jets, as well as related systems and equipment.

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.

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.

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