US approves potential US$1.5 billion FMS sale for Callao Naval Base in Peru

US$1.5 billion FMS proposal for Callao Naval Base

The United States Government has authorised a potential US$1.5 billion Foreign Military Sales (FMS) transaction with Peru. The proposal covers design and construction work for maritime and land-based facilities at Callao Naval Base, alongside related logistics and project-support provisions. It follows a recent notification by the U.S. Department of State to the U.S. Congress requesting approval for the deal.

The Defense Security Cooperation Agency (DSCA) has delivered the mandatory certification to the U.S. Congress, formally advising it of the possible sale. Under the request, Peru seeks equipment and services to support the procurement and modernisation of naval infrastructure at its principal maritime complex.

The package includes items designated as non-Major Defense Equipment, including lifecycle facility design and construction, project management, engineering studies and services, technical assistance, infrastructure evaluations, surveys, planning, programming, contract administration and construction management. It also encompasses technical, logistical and engineering support from the U.S. Government and contractors. The eventual value will be determined by final requirements and any agreements ultimately concluded.

Washington officials said the prospective sale supports U.S. foreign-policy goals by enhancing the security of a partner regarded as important to political stability, peace and economic development in South America. They added that the programme would upgrade Peru’s port infrastructure for present and future naval and logistics activities, while limiting overlap between civilian and military operations at existing sites.

The official notification states that delivering the project could require up to 20 representatives from the U.S. Government or U.S. contractors for as long as ten years to oversee and manage construction. It also specified that the transaction would neither undermine U.S. defence readiness nor change the regional military balance.

Naval and industrial modernisation in Callao

The prospective U.S. investment forms part of Peru’s wider effort to modernise its military capabilities, especially in the naval sphere. Peru recently concluded a submarine co-development contract involving Naval Industrial Services (SIMA Perú) and South Korea’s Hyundai Heavy Industries (HHI). Signed at Callao Naval Base, the arrangement provides for submarines to be built in Peru, with technology transfer and gradually increasing involvement from domestic industry.

Official information indicates that the scheme is intended to reinforce maritime sovereignty and establish a naval-sector industrial ecosystem bringing together engineers, technicians, universities and local suppliers.

Peruvian Armed Forces procurement programmes

Advances in the Air Force and the Army

Meanwhile, the Peruvian Congress authorised the second financing tranche for the procurement of 24 multirole fighter aircraft for the Peruvian Air Force (FAP), under the Public Sector Borrowing Law for fiscal year 2026. Around US$2.35 billion has been assigned to the Ministry of Defense, allowing one of the principal military re-equipment programmes initiated in 2024 to move forward.

The selection process has reached its final phase, with three aircraft under consideration: the Rafale F4 (Dassault Aviation), the F-16 Block 70 (Lockheed Martin) and the Gripen E/F (Saab). In September, the U.S. Department of State authorised a potential US$3.42 billion FMS sale of 12 F-16 Block 70 aircraft.

Separately, the Peruvian Army has confirmed it will acquire three PULS multiple rocket artillery systems produced by Israel’s Elbit Systems for close to US$60 million. It has also signed a framework agreement with South Korea’s Hyundai Rotem covering the future introduction of K2 Black Panther tanks and K808 White Tiger 8×8 armoured vehicles.

Collectively, these measures demonstrate a broad strategy to modernise the Peruvian Armed Forces, with the possible U.S.-approved Callao Naval Base sale standing among the most significant infrastructure schemes announced so far.