Stockholm: Sweden said on Thursday it would order two new submarines to boost its armed forces months after a futile hunt for a suspected Russian mini-sub in the Stockholm archipelago.
"The order... will ensure Sweden`s underwater capacity beyond 2030," Defence Minister Peter Hultqvist said in a statement.
"Underwater capacity is a central part of Sweden`s defence in peace time, as well as during emergencies and war," the ministry added.
Although no Swedish official ever identified the nationality of the elusive mini-sub -- hunted in a massive naval operation for a week in October following civilian sightings -- experts widely believed it to be Russian.
The failure to locate the sub raised questions over the non-aligned country`s military capabilities after years of cutbacks in the post-Cold War era.
The two new generation A 26 submarines to be produced by Swedish arms groups Saab have a maximum price tag of 8.2 billion kronor ($945 million, 886 million euros).
They are set to be delivered by 2022 at the latest.
Last week the government announced a 6.2 billion-kronor hike in defence spending largely focused on upgrading its capacity to detect and intercept submarines.
The extra funds would also be used to re-establish a permanent military presence on the strategic Baltic Sea island of Gotland, situated between southern Sweden and Latvia, for the first time in 10 years.