Australia announced on Thursday its commitment to invest billions of dollars in docks, shipyards, and factories both domestically and in Britain for the construction of nuclear-powered submarines under the AUKUS security pact. Additionally, Australia named Britain’s BAE Systems to assist in building the submarines.

The AUKUS agreement, involving Australia, Britain, and the United States, entails Australia purchasing up to five nuclear submarines from Washington in the early 2030s. Subsequently, Australia will collaborate with Britain in jointly building and operating a new class of submarines, SSN-AUKUS, roughly a decade later. This pact positions Australia as the seventh nation to operate nuclear-powered submarines and places additional pressure on shipyards in Britain and the United States, which are already facing delays and cost overruns.

To address these challenges, Australia will contribute 2.4 billion pounds ($3.1 billion) to Britain for design work on the conventionally armed SSN-AUKUS and the expansion of a Rolls-Royce plant responsible for building nuclear reactors for submarines. Additionally, Australia has committed $3 billion to U.S. shipyards, where the Virginia-class nuclear submarines it will purchase in the early 2030s will be constructed.

Defence Minister Richard Marles emphasized the opportunities for Australian industry arising from the AUKUS pact, as well as the importance of collaboration with UK and US partners. Australia will also invest A$1.5 billion ($993 million) to prepare a naval base in Western Australia for nuclear submarines, including those from the US and Britain expected to be based there part-time starting in 2027, with an estimated total project cost of A$8 billion.

The official launch of these investments will take place on Friday, with Australian and British foreign and defence ministers holding a joint news conference at shipyards in South Australia, where Australia’s AUKUS fleet will be constructed. BAE Systems has been selected to build the submarines in South Australia in partnership with local naval firm ASC, with construction expected to commence in the late 2020s.

Following completion, ASC will handle maintenance and logistics, working alongside unspecified US and British companies. BAE Systems has also been awarded a contract worth 4 billion pounds ($5.1 billion) to commence design work and infrastructure at the shipyard in Barrow-in-Furness, Britain, where SSN-AUKUS submarines will be built.

Given the specialized workforce required for nuclear submarines, BAE Systems and ASC will establish a joint skills center in South Australia to initiate worker training. Australia plans to send approximately 100 ASC workers to Pearl Harbor, Hawaii, next year for training at the US naval facility.

These investments underscore Australia’s commitment to enhancing its naval capabilities and deepening its strategic partnerships with the UK and the US under the AUKUS framework.