The Government of Finland has selected Rauma Marine Constructions (RMC) and Saab as the main contractors for the Squadron 2020 programme.

Under the project, The Finnish Navy will acquire four new Pohjanmaa-class corvettes at an estimated total cost of around €1.3bn.

Finland’s Ministry of Defence expects to sign the contracts with RMC and Saab on 26 September.

RMC will design and construct four new multipurpose corvettes for the Finnish Navy at Rauma shipyard.

The Finnish shipbuilding company and its subsidiary, RMC Defence, will build hulls of the vessels and integrate systems.

The Pohjanmaa-class corvettes are expected to be delivered by 2026 and become fully operational by 2028. Construction of the ships will cost up to €647.6m.

Rauma Marine Constructions CEO Jyrki Heinimaa said: “This agreement is significant not only for its effect on local employment and businesses, but also on a national level, since at peak time, the project will employ some 1,000 people.

“Through this agreement, Finland will once again have a domestically-built fleet, which supports our country’s security of supply.”

Saab will supply and integrate the combat system, including a 9LV Combat Management System and sensors, into the corvettes. The order value of the combat system is expected to be around €412m.

The Swedish firm defeated competition from Atlas Elektronik and Lockheed Martin Canada.

Saab business area Surveillance head Anders Carp said: “This announcement marks a major milestone in Saab’s relationship with Finland and we look forward to continuing to support the Finnish Navy’s capabilities with our world-leading combat system expertise.”

The Squadron 2020 project is aimed at replacing seven ageing vessels of the Finnish Navy with four modern corvettes.

The Pohjanmaa-class vessels will also feature a surface-to-surface missile system, surface-to-air missile system, and a torpedo weapon system.

Meanwhile, the government has also selected Finnish company Aker Arctic Technology to design, supply and integrate propellers and propeller shafts for the four vessels.