HD Hyundai Heavy Industries Co., a major South Korean shipbuilder, recently announced that it has signed a preliminary agreement with Peru’s state-owned Shipyard Marine Industrial Services (SIMA) to develop and construct new-generation submarines for the Peruvian Navy jointly.

The letter of intent (LOI) was signed on November 1 and outlines cooperation between the two sides on the design and building of submarines, HD Hyundai said in a statement. The companies aim to finalize a formal agreement within this year.

The submarines will later be built at HD Hyundai’s shipyard in Ulsan, located about 360 kilometers southeast of Seoul, according to the announcement.

Luis Silva Lopez, general manager of SIMA, said the LOI represents the first submarine co-development project involving a Latin American navy. He added that the project would promote the advancement and self-reliance of shipbuilding and defense technologies in Peru and across the region.

HD Hyundai is also cooperating with SIMA on four naval vessels for the Peruvian Navy, including frigates, offshore patrol vessels, and landing support ships.