Wednesday, October 4, 2023

L&T & Navantia Forge Landmark Submarine Pact, Eyeing India’s Biggest Defence Project & Green Energy Ventures

By Staff Correspondent

In a significant move for India’s defence sector, Larsen & Toubro (L&T) and Spanish shipbuilding firm Navantia have announced a teaming agreement to submit a joint bid for the Indian Navy’s Project 75 (I) submarine programme. The agreement was finalised on July 10, 2023, in the presence of key figures, including S N Subrahmanyan, CEO & MD of L&T, and Augustin Alvarez Blanco, Naval Construction Vice President of Navantia, among others, at the Spanish Embassy in New Delhi.

Project 75 (I) involves delivering six conventional submarines equipped with Air-Independent Propulsion (AIP) in collaboration with a foreign entity. With an estimated value of over €4.8 billion, it is set to be India’s largest defence procurement project. Additional incentives include a 30-year lifecycle sustenance contract of similar value.

This project will be the first executed under the Ministry of Defence’s (MoD) new Strategic Partnership model to boost local manufacturing. The partnership between L&T and Navantia began with a memorandum of understanding signed in April earlier this year.

Under the current agreement, Navantia will design the Project 75 (I) submarines based on their advanced S80 class, the first of which is scheduled for delivery to the Spanish Navy by year-end after sea trials. Navantia, in partnership with France’s Naval Group, has also been involved in the Scorpéne class submarine design and construction, exported to Chile and Malaysia and implemented in India.

The project will integrate Navantia’s cutting-edge 3rd Generation AIP system, renowned for its compactness, ease of use and maintenance, and environmental compatibility. Its bioethanol-based hydrogen source makes it cost-efficient and globally operable, avoiding the risks associated with storing hydrogen.

In addition to the submarine project, the L&T-Navantia collaboration extends to other defence projects and green energy opportunities, including offshore wind ventures through Navantia’s Seanergies division.

Subrahmanyan, expressing his company’s commitment to the venture, praised Navantia’s extensive naval construction history and technical proficiency as giving them a “competitive advantage”. Meanwhile, Blanco welcomed the opportunity to contribute significantly to India’s defence sector, given Spain’s excellent relations with the country.

For context, Larsen & Toubro is a USD 23 billion Indian multinational known for its expertise in EPC projects, hi-tech manufacturing and services, operating in over 50 countries.

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