The Swedish Navy has awarded a contract for the modernisation of two "Västergotland" Class submarines to HDW's Swedish subsidiary company Kockums Naval Systems AB. The order is worth approximately 600 million Swedish crowns and includes the installation of an air-independent Stirling cycle engine propulsion system, which will permit these submarines to remain submerged for much longer periods of time than is possible with conventional non-nuclear propulsion systems.

The Stirling cycle engine, the result of several years of development on the part of Kockums, has received international acclaim and is employed by the shipyard's export customers, such as Japan. The two Swedish submarines earmarked for modernisation will be fitted with the most recent version, Stirling Mk. 3. When this modernisation programme has been completed, the Swedish Navy will have 5 submarines with Stirling cycle engine propulsion systems at its disposal.

As a result of their joint approach, HDW and Kockums are now in a position to offer their customers two different air-independent propulsion systems: HDW on the basis of the H2O2 fuel cell and Kockums with the Stirling cycle engine.