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Spain signs $2.2 billion framework deal to sell warships to Saudi Arabia

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MADRID (Reuters) - Spain and Saudi Arabia have signed a framework agreement to sell the Gulf Arab state warships under a deal estimated to be worth around 1.8 billion euros (£1.6 billion).

Saudi Arabia’s crown prince and Spain’s defence minister signed an “executive summary to facilitate the necessary procedures” for the Saudi Defence Ministry to sign a contract with Spanish state-owned shipbuilder Navantia for the supply of warships, a Saudi government statement said late on Thursday.

It said another agreement was signed between state-owned Saudi Arabian Military Industries Company and Navantia, but did not provide further details.

A Spanish Defence Ministry source said that under the deal, Navantia would sell five small warships, Spain’s army would train Saudi military personnel and contractors would build a naval construction centre in the kingdom.

Campaign groups Amnesty International, Spain’s FundiPau, Greenpeace and Oxfam have called on Spain to stop selling military equipment to the Saudis, accusing the kingdom of abusing rights - charges it denies.

The two sides have been negotiating the warship deal since 2015, and the final contract between the Saudi Defence Ministry and Navantia would take longer to complete, the source said.

An industry official confirmed the details of the agreement, though Navantia declined to comment.

Saudi Crown Prince Mohammed bin Salman, who serves as defence minister and controls economic and energy policy, was welcomed by Spain’s King Felipe VI at the Zarzuela palace on the outskirts of Madrid.

He also met Prime Minister Mariano Rajoy and Defence Minister Maria Dolores de Cospedal during his visit which culminated in the signing of six agreements in the areas of defence, air transport, culture, technology and labour and social development, the Saudi statement said.

Writing by Isla Binnie; Editing by Julien Toyer and Alison Williams