BRASILIA, Aug 5 (Reuters) - Brazil’s Senate approved on Wednesday a $4.6 billion financing agreement reached last week with Sweden for the purchase of 36 Gripen fighter jets from Swedish planemaker Saab AB for the Brazilian Air Force.
The Senate rushed through a request from President Dilma Rousseff’s government authorizing it to borrow up to 39.88 billion Swedish crowns from Sweden’s export credit agency SEK and take out an additional loan in dollars for $245.3 million.
In the midst of a fiscal crunch, Brazil managed to negotiate better terms, reducing the interest rate for the SEK financing to 2.19 percent from 2.54 percent agreed last year. Brazil has 25 years to repay the loan, with an eight-year grace period.
The borrowing authorization was backed by opposition parties who said it was a strategic purchase for the country’s defense.
The first Gripen NG fighter jets should be delivered to Brazil in 2019. Saab plans to set up a Brazilian assembly line producing the fighter jets through 2024 in partnership with Brazilian planemaker Embraer SA.
The contract provides for full transfer of technology and the production of 15 of the jets in Brazil.
Brazil awarded the contract in December 2013, choosing Saab’s fighter over Boeing Co.’s F-18 Super Hornet and the Rafale made by France’s Dassault Aviation SA.
Brazil signed an additional $245 million deal with Saab in April to supply arms for the Gripens.
$1 = 8.6783 Swedish crowns Reporting by Anthony Boadle; Editing by Ken Wills