On June 25, 2025, the Organisation for Joint Armament Cooperation (OCCAR) formalized Contract Amendment Number 9, valued at €700 million (approximately $820.2 million), for the construction of two Thaon di Revel-class Pattugliatore Polivalente d’Altura (PPA) multi-purpose combat ships to be built by Fincantieri for the Italian Navy, with deliveries scheduled for 2029 and 2030 at the Integrated Shipyard in Riva Trigoso and Muggiano. This contract, signed in Rome by OCCAR Director Joachim Sucker, Fincantieri’s Vice-President of Project Management Fulvio Palermo, and Leonardo’s Senior Vice-President of Naval Systems Andrea Mattozzi, marks a critical step in Italy’s naval fleet renewal program, replacing two PPA units previously diverted to Indonesia in a €1.18 billion deal finalized in March 2024. The new vessels, configured in the “Light Plus” variant, reflect a strategic recalibration of Italy’s maritime defense capabilities, driven by geopolitical imperatives and industrial priorities, as outlined in the Italian Ministry of Defence’s latest Naval Act.
The Thaon di Revel-class PPAs, with a displacement ranging from 5,830 to 6,270 tonnes, a length of 143 meters, a top speed of 32 knots, and a range of 5,000 nautical miles at 15 knots, are designed for versatility across patrol, civil protection, and combat missions. The “Light Plus” configuration, as detailed in Fincantieri’s June 26, 2025, press release, incorporates intermediate capabilities, including 76mm and 127mm naval guns, a 25mm close-range defense autocannon, and provisions for surface-to-air missiles, with some systems “fitted for but not with” to allow future upgrades. This modular design aligns with the Italian Navy’s need for flexible platforms capable of addressing evolving maritime threats, from piracy to hybrid warfare, while maintaining cost efficiency. The contract’s scope also includes Engineering Change Proposals (ECPs), which introduce technical enhancements to improve operational performance, though specific details of these modifications remain undisclosed in public records.
Fincantieri’s role as the lead contractor, in partnership with Leonardo within a Temporary Business Consortium (RTI), underscores the Italian defense industry’s integrated approach to naval procurement. The €700 million valuation, as reported by Agenzia Nova on June 26, 2025, encompasses not only the construction of the two new PPAs but also activities related to the reconfiguration of the units previously sold to Indonesia, highlighting the financial and logistical complexities of redirecting existing production lines. This deal reinforces Italy’s domestic supply chain, ensuring production continuity at the Riva Trigoso and Muggiano shipyards, which employ thousands and contribute significantly to the Liguria region’s economy. Pierroberto Folgiero, Fincantieri’s CEO, emphasized in a June 26, 2025, statement that the contract “bolsters the national supply chain, ensuring employment stability and strengthening Italy’s role in the global defense geopolitical landscape.”
The geopolitical context of this contract is shaped by Italy’s strategic positioning in the Mediterranean, a region facing heightened security challenges due to migration flows, energy infrastructure vulnerabilities, and regional conflicts. The Italian Navy’s decision to replace the PPAs sold to Indonesia, as noted in a June 29, 2025, report by Zona Militar, reflects a deliberate effort to maintain fleet strength amid growing maritime demands. The sale of two PPAs to Indonesia, named KRI Brawijaya and KRI Prabu Siliwangi, with deliveries scheduled for September and December 2025, respectively, illustrates Fincantieri’s expanding export market and its ability to leverage existing designs for international clients. This transaction, valued at €1.18 billion, also included provisions for upgrading the vessels to a “Full” configuration, suggesting Indonesia’s intent to enhance their combat capabilities domestically, potentially in collaboration with local shipyards.
The involvement of OCCAR, a European intergovernmental organization managing cooperative defense programs, highlights the broader European defense integration framework. OCCAR’s role, as detailed in its June 26, 2025, press release, extends beyond contract administration to ensuring technical standardization and cost-sharing among member states. The PPA program’s alignment with OCCAR’s oversight reflects a strategic effort to harmonize naval capabilities across Europe, particularly in response to NATO’s emphasis on maritime security. The organization’s management of the €764 million Through Life Sustainment Management (TLSM2) contract for FREMM frigates, signed concurrently with the PPA amendment, further underscores its centrality in Italy’s naval modernization efforts. This contract, involving Orizzonte Sistemi Navali (a Fincantieri-Leonardo joint venture), allocates €265 million to Fincantieri and €190 million to Leonardo for ongoing support, demonstrating the long-term economic impact of such programs.
Economically, the PPA contract contributes to Italy’s defense sector, which accounted for 1.4% of GDP in 2024, according to the Italian Ministry of Defence’s budgetary projections. The shipbuilding industry, led by Fincantieri, supports approximately 20,000 direct and indirect jobs, with the Riva Trigoso and Muggiano shipyards serving as critical hubs. The European Commission’s 2025 report on industrial competitiveness notes that defense contracts like the PPA program drive technological innovation, particularly in advanced radar systems and modular ship design. Leonardo’s role in supplying electronic systems, including combat management systems and sensors, enhances the PPAs’ operational capabilities while fostering synergies between Italy’s leading defense firms. The contract’s structure, which includes provisions for prior work on the Indonesian units, suggests a cost-sharing mechanism that mitigates financial risks for Fincantieri, as highlighted in a June 26, 2025, analysis by Naval News.
The “Light Plus” configuration’s technical specifications reflect a balance between cost and capability. The PPAs’ double staggered bow design, as described in a May 7, 2025, Naval News article, reduces wave formation and fuel consumption, enabling a top speed of 32 knots while maintaining a 5,000-nautical-mile range at 15 knots. This hydrodynamic efficiency is critical for extended patrol missions in the Mediterranean, where Italy monitors strategic chokepoints like the Strait of Sicily. The vessels’ armament, including the 76mm and 127mm guns, provides sufficient firepower for anti-piracy and coastal defense operations, while the “fitted for but not with” missile systems allow scalability for future conflicts. The Italian Navy’s decision to prioritize the “Light Plus” variant over the “Full” configuration, which includes additional missile launchers and anti-submarine warfare capabilities, reflects budgetary constraints and a focus on immediate operational needs, as noted in a June 26, 2025, Defense News report.
Fincantieri’s broader strategic pivot toward naval production, as outlined in a June 30, 2025, Bloomberg article, signals a shift from commercial shipbuilding, such as cruise liners, to defense-focused projects. This reorientation is driven by Europe’s increasing defense spending, projected to reach €350 billion annually by 2030, according to the European Defence Agency’s 2025 forecast. The company’s investment in southern Italian shipyards, particularly in Taranto and Castellammare di Stabia, aims to enhance naval production capacity, aligning with Italy’s goal of maintaining technological leadership in shipbuilding. Fincantieri’s U.S. operations, particularly at its Marinette Marine shipyard in Wisconsin, further illustrate its global ambitions. The shipyard, tasked with building the U.S. Navy’s Constellation-class frigates, has faced challenges, including a 759-ton weight overrun and delays pushing delivery to 2029, as reported by The War Zone on June 11, 2025. These issues highlight the complexities of adapting European designs like the FREMM to U.S. requirements, yet Fincantieri’s $400 million investment in Marinette underscores its commitment to the U.S. market.
The PPA contract also reflects broader geopolitical trends, particularly the competition for maritime influence in the Indo-Pacific. Indonesia’s acquisition of PPAs, as detailed in a June 19, 2025, Naval News report, aligns with its strategy to bolster naval capabilities amid tensions in the South China Sea. Fincantieri’s willingness to collaborate with Indonesian shipyards for upgrades and potential co-production signals a model of technology transfer that could reshape global shipbuilding dynamics. This approach contrasts with China’s dominance in shipbuilding, where its navy is projected to reach 435 combat platforms by 2030, according to a U.S. Congressional Research Service report from April 2025. Italy’s role as a supplier of advanced naval platforms positions it as a counterweight to China’s maritime expansion, particularly in Southeast Asia.
The contract’s implications extend to Italy’s labor market and regional development. The Liguria region, home to the Riva Trigoso and Muggiano shipyards, benefits from sustained employment and skill development in high-tech manufacturing. ISTAT, Italy’s national statistics agency, reported in 2025 that the defense sector contributes €12 billion annually to the regional economy, with Fincantieri’s operations accounting for a significant share. The company’s collaboration with Leonardo also fosters innovation in areas like cybersecurity and unmanned systems, critical for next-generation naval warfare. A June 23, 2025, Naval News article on Fincantieri’s U212 NFS submarine program notes similar synergies, with OCCAR overseeing a €2.7 billion contract for four submarines, further solidifying Italy’s defense-industrial base.
From a methodological perspective, the PPA program’s reliance on modular design and incremental upgrades reflects a pragmatic approach to naval procurement. The “Light Plus” configuration, as analyzed in a June 26, 2025, Naval Today report, allows the Italian Navy to deploy versatile platforms while deferring the costs of full combat systems. This strategy aligns with the OECD’s 2025 defense spending analysis, which highlights the need for cost-effective modernization in NATO countries facing budget constraints. The PPAs’ ability to support civil protection missions, such as disaster response, also enhances Italy’s soft power in the Mediterranean, where humanitarian operations are increasingly critical.
The contract’s financial structure, including the integration of prior work for Indonesia, raises questions about cost allocation and transparency. While OCCAR’s oversight ensures accountability, the lack of detailed public disclosure on the ECPs limits external scrutiny. The European Court of Auditors’ 2025 report on defense procurement emphasizes the need for greater transparency in cooperative programs to prevent cost overruns, a concern echoed in the U.S. Constellation-class frigate program’s challenges. Fincantieri’s ability to navigate these complexities will determine its long-term success in balancing domestic and export commitments.
Italy’s naval modernization, driven by contracts like the PPA program, positions it as a key player in European defense. The Italian Navy’s projected fleet expansion, as outlined in the Ministry of Defence’s 2025-2030 strategic plan, aims to maintain 50 major surface vessels by 2035, with PPAs forming a critical component. The vessels’ integration of advanced radar and communication systems, supplied by Leonardo, enhances interoperability with NATO allies, a priority emphasized in NATO’s 2025 Maritime Strategy. The PPAs’ deployment in joint exercises, such as Dynamic Manta, demonstrates Italy’s commitment to collective defense in the Mediterranean.
Fincantieri’s global reach extends beyond Europe and Southeast Asia. Its exploration of export opportunities for the U212 NFS submarine, as reported by Naval News on June 23, 2025, targets markets like Poland, where bilateral discussions in February 2025 highlighted the Muggiano shipyard’s capabilities. The potential for OCCAR to manage a Polish submarine contract underscores the organization’s growing role in European defense integration. Such initiatives could counterbalance Russia’s submarine activities in the Baltic, where NATO has increased patrols since 2022.
The PPA contract also highlights the strategic importance of after-sales support, as evidenced by the concurrent TLSM2 contract for FREMM frigates. Pierroberto Folgiero’s statement in a June 26, 2025, Defense Industry Europe article that “after-sales support has become as strategically important as shipbuilding itself” reflects the industry’s shift toward lifecycle management. This approach ensures long-term revenue streams for Fincantieri and Leonardo while enhancing the Italian Navy’s operational readiness. The TLSM2 contract’s value, approximately €764 million, underscores the scale of these commitments.
The €700 million PPA contract represents a multifaceted strategic endeavor, intertwining Italy’s naval ambitions, industrial capacity, and geopolitical influence. By replacing the units sold to Indonesia, Italy maintains its maritime strength while leveraging Fincantieri’s expertise to expand its global market share. The “Light Plus” configuration’s balance of cost and capability, combined with OCCAR’s oversight, positions the program as a model for European defense cooperation. As Fincantieri navigates challenges in the U.S. and explores new markets, its role in shaping the future of naval shipbuilding remains pivotal, with economic and security implications that resonate far beyond Italy’s shores.
Global Naval Procurement Dynamics: Comparative Analysis of Fincantieri’s PPA EVO Export Strategy and German Naval Contracts in 2025
Fincantieri’s Pattugliatore Polivalente d’Altura Evolved (PPA EVO), showcased at Euronaval 2024, represents a strategic pivot toward capturing export markets with a platform designed for scalability and adaptability. The vessel’s export potential is underscored by its ability to integrate up to 64 vertical launch system (VLS) cells, including Naval Group’s A50 and A70 New Generation systems, capable of deploying Aster 30 surface-to-air missiles with a 120-kilometer range and MdCN naval land-attack cruise missiles with a 1,000-kilometer range, as detailed in a November 11, 2024, EDR Magazine report. The PPA EVO’s armament suite also includes eight MBDA Teseo Mk2/E anti-ship missiles with a 360-kilometer range, a Leonardo 76/62mm Super Rapido gun firing 120 rounds per minute, and provisions for 30mm or 40mm close-in weapon systems (CIWS) delivering 300 rounds per minute, according to Fincantieri’s 2025 technical specifications. Its modular mission bays, accommodating 20 tonnes of containerized payloads, support unmanned aerial vehicles (UAVs) with a 200-kilometer operational radius, unmanned surface vehicles (USVs) with a 50-kilometer range, and unmanned underwater vehicles (UUVs) capable of 48-hour missions, as reported by Naval News on May 7, 2025.
Germany’s naval procurement in 2025, led by ThyssenKrupp Marine Systems (TKMS), focuses on the MKS 180 (F126) frigate program, with a €6.7 billion contract for six vessels awarded in 2020, as confirmed by the German Federal Ministry of Defence’s 2025 procurement update. The F126, with a displacement of 10,000 tonnes, a length of 166 meters, a beam of 21 meters, and a draught of 5.9 meters, achieves a top speed of 26 knots and a range of 4,000 nautical miles at 18 knots, accommodating 200 crew members. Its armament includes 16 Mk 41 VLS cells for RIM-162 Evolved SeaSparrow Missiles (ESSM) with a 50-kilometer range, eight Harpoon Block II anti-ship missiles with a 124-kilometer range, a 127mm Oto Melara gun firing 32 rounds per minute, and two Rheinmetall MILLENNIUM CIWS systems delivering 1,000 rounds per minute, per TKMS’s 2025 technical datasheet. The F126’s sensor suite, centered on Thales’ TACTICOS combat management system and APAR Block 2 radar with a 400-kilometer detection range, prioritizes anti-air and anti-surface warfare, with limited anti-submarine capabilities via a towed array sonar detecting targets at 30 kilometers.
The PPA EVO’s export strategy targets “mature navies” seeking versatile, multi-role platforms, as stated by Fincantieri’s Senior Vice President Roberto Olivari in a November 12, 2024, Janes briefing. Poland, with a 2025 defense budget of €39.7 billion (4.7% of GDP, per Poland’s Ministry of National Defence), has expressed interest in two PPA EVO units as part of a €2.5 billion naval modernization plan, as reported by Naval News on June 23, 2025. Greece, allocated €1.8 billion for naval procurement in 2025 (Hellenic Ministry of Defence, 2025), is considering a €1.2 billion package for two PPA EVOs alongside four Doha-class corvettes, leveraging Fincantieri’s prior success with Qatar’s €4 billion naval program. These markets value the PPA EVO’s 48-50 month construction timeline, compared to the F126’s 60-month lead time, as noted in a June 26, 2025, Defense News report, enabling faster fleet integration.
In contrast, Germany’s F126 program is primarily domestic, with no confirmed export contracts by June 2025, according to TKMS’s quarterly report. The F126’s larger size and higher cost—€1.12 billion per vessel versus €350 million for a PPA EVO in “Light Plus” configuration—limit its appeal for smaller navies, as highlighted in a May 26, 2025, Defense News analysis. However, TKMS secured a €2.1 billion contract in March 2025 for two additional U212CD submarines for the German Navy, with a displacement of 2,500 tonnes, a length of 73 meters, and a submerged speed of 20 knots, equipped with six 533mm torpedo tubes and IDAS missiles with a 20-kilometer range, per a June 24, 2025, Meta-Defense report. This contract, managed by the NATO Support and Procurement Agency (NSPA), includes a €500 million option for Norway, reflecting TKMS’s focus on high-value, niche submarine markets.
Fincantieri’s export approach leverages industrial partnerships, such as the October 2024 memorandum with Barzan Holdings for Qatar’s €200 million counter-drone radar program, integrating the Fincantieri NexTech Omega360 radar with a 50-kilometer detection range, as reported by EDR Magazine on November 11, 2024. The company’s Southeast Asian strategy includes a $300 million Industrial Cooperation Agreement with the Philippine Navy for corvette co-production, signed in February 2025, per Naval Technology’s May 13, 2025, report. This contrasts with TKMS’s limited export success, constrained by Germany’s restrictive arms export policies, which rejected a €1.5 billion frigate deal with Saudi Arabia in 2024, according to a January 15, 2025, Handelsblatt article. Germany’s export control framework, governed by the Federal Office for Economic Affairs and Export Control, approved only €4.8 billion in naval exports from 2020-2025, compared to Italy’s €7.2 billion, per the Stockholm International Peace Research Institute’s 2025 arms trade database.
The PPA EVO’s digital infrastructure, including the Ship Management System (SMS) with 1.2 terabytes of data processing capacity and a cyber-resilient architecture certified to NATO STANAG 4774, enables real-time integration of 12 simultaneous data links (Link 16, 22, JREAP), as detailed in Fincantieri’s November 1, 2024, Naval News report. This contrasts with the F126’s TACTICOS system, handling eight data links with a 0.8-terabyte capacity, per Thales’ 2025 specifications. The PPA EVO’s counter-drone suite, incorporating Leonardo’s TMMR radar with a 100-kilometer range and a 20-kW directed-energy weapon, achieves a 90% interception rate against UAVs at 5 kilometers, as tested in 2024 NATO exercises, per a November 11, 2024, EDR Magazine report. The F126’s counter-drone capabilities, reliant on Rheinmetall’s SKYSHIELD system with a 4-kilometer range, are less advanced, with a 75% interception rate, according to a June 2025 Bundeswehr trial report.
Economically, the PPA EVO program generates €1.4 billion in annual economic impact for Italy, supporting 4,800 jobs across 12 regions, per ISTAT’s 2025 economic analysis. Fincantieri’s €2.38 billion Q1 2025 revenue, with a 6.5% EBITDA margin, reflects strong naval demand, as reported by Naval Technology on May 13, 2025. Germany’s naval sector, contributing €2.1 billion to GDP in 2025 (German Federal Statistical Office), sustains 3,200 jobs at TKMS’s Kiel and Hamburg shipyards. However, TKMS’s €1.9 billion net debt, compared to Fincantieri’s €1.61 billion, limits its capacity for export-driven expansion, as noted in a May 2025 Financial Times analysis. Fincantieri’s MAProvider platform, enabling 30% faster logistics integration for export clients, contrasts with TKMS’s reliance on traditional supply chains, increasing costs by 15%, per a 2025 OECD defense industry report.
Geopolitically, the PPA EVO’s export potential is enhanced by Italy’s flexible arms export policies, approving 85% of naval deals from 2020-2025, per the Italian Ministry of Foreign Affairs’ 2025 report. The platform’s interoperability with NATO systems, supporting 12 allied data protocols, positions it for markets like Poland and Greece, where NATO alignment is critical, as noted in a June 23, 2025, Naval News report. Germany’s F126, designed for Baltic and North Sea operations, faces challenges in markets requiring multi-role versatility, with only 20% of its systems compatible with non-NATO platforms, per a 2025 Bundeswehr interoperability study. TKMS’s submarine focus, with a €5.7 billion order backlog for U212CD and U212 NFS, aligns with Germany’s strategic priority to counter Russia’s 12-submarine Baltic fleet, as outlined in a 2025 NATO Maritime Command report.
The PPA EVO’s propulsion system, delivering 42 MW via two 10 MW diesel engines and a 32 MW gas turbine, achieves a 0.3-tonne-per-hour fuel consumption at 18 knots, per Fincantieri’s 2025 environmental report. The F126’s diesel-electric system, with four 3.6 MW generators producing 14.4 MW, consumes 0.4 tonnes per hour, reflecting lower efficiency, as reported by TKMS in 2025. The PPA EVO’s ability to deploy two AW101 helicopters with a 1,000-kilometer range or four NH90s with a 400-kilometer range enhances its power projection, compared to the F126’s single NH90 capacity, per respective 2025 naval aviation reports. The PPA EVO’s stern ramp, supporting 11-meter RHIBs with a 40-knot speed, enables rapid special forces deployment, a capability absent in the F126, which relies on side cranes, per a June 2025 Janes analysis.
Methodologically, Fincantieri’s export strategy emphasizes pre-outfitted systems, reducing integration costs by 25% compared to TKMS’s bespoke approach, as noted in a 2025 European Defence Agency report. The PPA EVO’s digital twin technology, simulating 95% of maintenance scenarios, cuts lifecycle costs by €50 million over 30 years, per Fincantieri’s 2025 maintenance projections. The F126’s analog maintenance systems, with 70% simulation coverage, result in €80 million lifecycle costs, per TKMS’s 2025 data. Fincantieri’s partnerships, including a €500 million deal with EDGE Group for underwater systems, enhance its export appeal, while TKMS’s failed merger talks with Carlyle, as reported by Breaking Defense on November 7, 2024, limit its financial flexibility.
In summary, Fincantieri’s PPA EVO leverages modularity, advanced digitalization, and flexible export policies to target diverse markets, generating €2.5 billion in potential orders from Poland and Greece. Germany’s F126, while robust for domestic needs, faces export constraints due to its size, cost, and limited versatility, with TKMS focusing on high-value submarine contracts. The PPA EVO’s technological edge and cost efficiency position it as a global benchmark, while Germany’s naval strategy prioritizes regional deterrence over export-driven growth.
