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France, Egypt agree 950 mln euro Mistral warship deal
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In this March 5, 2014 file photo, French-built warship BPC Vladivostock, designed to strengthen Russia's ability to deploy troops, tanks and helicopter gunships, leaves the Saint Nazaire's harbor, western France. (AP Photo/David Vincent, File)

In this March 5, 2014 file photo, French-built warship BPC Vladivostock, designed to strengthen Russia’s ability to deploy troops, tanks and helicopter gunships, leaves the Saint Nazaire’s harbor, western France. (AP Photo/David Vincent, File)

Paris, Reuters—France has agreed to sell two Mistral helicopter carriers to Egypt for 950 million euros ($1.06 billion) after their sale to Russia was canceled in August, French officials said on Wednesday.

Cairo has sought to boost its military power in the face of a two-year insurgency based across the Suez Canal in the Sinai Peninsula and fears the conflict in neighboring Libya could spill over. Egypt’s allies are also keen to burnish its image in a region beset by turmoil.

“We unwound the contract we had with Russia, on good terms, respectful of Russia and not suffering any penalty for France,” Hollande told reporters on his arrival at an EU summit in Brussels.

“Yesterday, I agreed the price and conditions of this sale with (Egyptian) President (Abdel Fattah El-) Sisi and so France will ensure the delivery of these ships without losing anything, while helping protect Egypt.”

A French defense ministry source said the contract was worth about 950 million euros, but unlike the deal with Moscow would not include any technology transfer.

As of yet there had been no talks on the potential armament for the carrier, which can hold up to 16 helicopters and 1,000 troops.

“The ships should be handed over in early March after the training of about 400 Egyptians and some final tests,” the source said.

A diplomatic source said Cairo wanted to base one ship in the Mediterranean and another in the Red Sea, making it available for future operations in Yemen, where Egypt is part of a Saudi-led coalition fighting Houthi rebels.

The French government agreed to reimburse 950 million euros to Moscow last month after the Mistral sale to Russia was canceled as a result of the Ukraine crisis.

France has also benefited from what some Gulf countries perceive as disengagement from a traditional ally, the United States.

The Mistral is known as the “Swiss army knife” of the French navy for its versatility. The sale will take the number of French naval vessels sold to Egypt to seven in just two years.

Egypt last year bought four small Gowind warships, built by Mistral manufacturer DCNS, which is 64 percent owned by the French state and 35 percent by defense group Thales.

It also acquired a French frigate as part of a 5.2 billion euro contract for 24 Rafale warplanes earlier this year, France’s first overseas export of the fighter jet. ($1 = 0.8953 euros)