Australia will invest billions in nuclear-powered submarine shipyards over the next two decades.

Australia has announced plans to invest billions of dollars to expand its main shipyard in Western Australia. The aim is to turn it into a maintenance center for the country’s future fleet of nuclear-powered submarines under the AUKUS defense agreement.

The government announced an initial investment of A$127 million ($85 million) over three years to modernize the Henderson Shipyard near Perth.

The shipyard expansion is part of a long-term plan to increase shipbuilding activity for the Australian Navy.

Defence Minister Richard Marles said the amendments would “streamline Australia’s shipbuilding and repair industry”, making Henderson a major player in constructing and repairing naval vessels, including the country’s nuclear-powered submarines.

The Henderson facility will not only serve as a maintenance center for nuclear submarines. It will also build new landing ships for the Australian Army and new frigates for the Navy.

Marles said the shipyard would help finance major defense investments worth A$368 billion ($245.8 billion) over the next 20 years and create around 10,000 local jobs.

The AUKUS Defence Agreement, signed by Australia, the United States, and the United Kingdom in 2021, is a landmark deal that will see Australia purchase up to five nuclear-powered submarines from the United States in the early 2030s.

In addition, Australia and the United Kingdom will collaborate to design, build, and operate a new submarine, the SSN-AUKUS, which is expected to begin operations a decade later.

The submarines will be nuclear-powered but will not carry nuclear weapons.

This is the first time the United States has publicly demonstrated its nuclear propulsion technology since the 1950s when it was shared only with the United Kingdom.

Official estimates estimate that the entire agreement will cost A$368 billion by 2055, making it vital to Australia’s defense strategy.