UPDATE 1-Brazil launches program to build nuclear submarine in a decade
* Submarine plan reaffirms Brazil's growing importance -Rousseff
* Brazil to spend $3.95 billion to build French submarines
* Aims to bolster national defense, spur domestic arms industry (Adds president, defense minister comments)
BRASILIA, March 1 (Reuters) - Brazil advanced on Friday toward its target of joining the small club of nations that have nuclear-powered submarines with the opening of a naval shipyard installation that will build French-designed submarines.
President Dilma Rousseff inaugurated the factory that will make metal hull structures for four conventional diesel-electric Scorpene attack submarines and eventually a fifth submarine powered by a nuclear reactor developed entirely by Brazil.
She said Brazil, one of the BRICS group of leading emerging nations and Latin America's largest nation, was a peaceful country but a defense industry was needed to deter and prevent violent conflict.
"This facility allows our country to affirm itself on the world stage and, above all, develop in an independent sovereign way," Rousseff said.
The submarines will be made by French shipbuilder DCNS in a joint venture with Brazil's Odebrecht at the Brazilian Navy base on Sepetiba Bay south of Rio de Janeiro.
The 7.8 billion reais ($3.95 billion) program will turn out the first conventional submarine in 2015 and the nuclear-powered submarine will be commissioned in 2023 and enter operation in 2025, the Brazilian Navy said in a statement.
The submarines are a key part of Brazil's effort to build a modern navy that can defend its oil and trade interests in the South Atlantic, a region long dominated by the British and U.S. navies. It is also a revival of nuclear development by the Brazilian military that was halted in 1990 with the end of the country's nuclear bomb program.
If successful, Brazil will join the United States, Russia, Britain, France and China - the five members of the permanent U.N. Security Council, a club Brazil aspires to join - as a country with a home-grown nuclear submarine capability.
The Indian Navy has a nuclear-powered attack submarine, the INS Chakra, that was leased from Russia, and India is building a nuclear submarine with its own technology that is expected to be in service by 2015.
BEEFING UP DEFENSES
The commander of the Brazilian Navy, Admiral Julio Soares de Moura Neto, said the purpose of building a nuclear-powered submarine was "deterrence" and stressed that the nuclear propulsion system will be built with entirely home-grown technology that was not transferred by France.
The Brazilian-French submarine program was agreed to in 2008 by Presidents Luiz Inacio Lula da Silva and Nicolas Sarkozy and is Brazil's most costly military project.
"Brazil needs to modernize its national defenses because we have not invested in this for years," said congressman Leonardo Gadelha, of the Social Christian Party, a member of the lower chamber's International Relations and Defense Committee. "Brazil has one of the longest coastlines in the world and we need submarines to patrol and defend this coast," he told Reuters.
The Brazilian Air Force is seeking to renew its fleet with the purchase of 36 fighter jets, a coveted defense contract worth $4 billion initially. Boeing Co., France's Dassault Aviation SA and Sweden's Saab are in the running for the deal.
Brazil is also boosting its air defenses, with an eye to dispelling the risk of terrorist attacks when hundreds of thousands of foreign tourists visit the country for the 2014 soccer World Cup and the 2016 Summer Olympic Games.
Brasilia recently announced plans to buy anti-aircraft batteries and mid-range surface-to-air missiles from Russia, and drones from Israel that will be used to patrol its long frontiers. It eventually plans to build the weapons locally.
The Brazilian government has insisted on a maximum transfer of technology in such military deals to build up its emerging private defense industry that has become a major arms exporter.
"Brazil has fully understood that national defense cannot be delegated to others and a country must have an autonomous capacity" that does not depend on foreign technology, Defense Minister Celso Amorim said at the naval base event.
On Wednesday, the defense unit of Brazilian planemaker Embraer SA won its first-ever U.S. military contract for the sale of 20 Super Tucano light attack planes for use in counterinsurgency in Afghanistan.
"It was a certificate of quality for our defense industry," Amorim said.
($1 = 1.98 Brazilian reais) (Editing by Philip Barbara and Paul Simao)