By Anthony Boadle
BRASILIA, March 1 (Reuters) - Brazil took a major step on Friday toward joining the small club of nations that have nuclear-powered submarines with the opening of a naval shipyard installation that will build French-designed submarines.
President Dilma Rousseff inaugurated the factory that will make metal hull structures for four conventional diesel-electric Scorpene attack submarines and eventually a fifth submarine powered by a nuclear reactor developed entirely by Brazil.
The submarines will be made by French shipbuilder DCNS in a joint venture with Brazil's Odebrecht at the Brazilian Navy base on Sepetiba bay south of Rio de Janeiro.
The 7.8 billion reais ($3.95 billion) program will turn out the first conventional submarine in 2015 and the nuclear-powered submarine will be commissioned in 2023 and enter operation in 2025, the Brazilian Navy said in a statement.
The submarines are a key part of Brazil's effort to build a modern navy that can defend its oil and trade interests in the South Atlantic, a region long dominated by the British and U.S. navies. It is also a revival of nuclear development by the Brazilian military that was halted in 1990 with the end of the country's nuclear bomb program.
If successful, Brazil will join the United States, Russia, Britain, France and China - the five members of the permanent U.N. Security Council, a club Brazil aspires to join - as a country with a home-grown nuclear submarine capability.
The Indian Navy has a nuclear-powered attack submarine, the INS Chakra, that was leased from Russia, and India is building a nuclear submarine with its own technology that is expected to be in service by 2015.
The Brazilian Navy statement stressed that the nuclear propulsion system will be built with entirely home-grown technology that was not transferred by France.
"Brazil needs to modernize its national defenses because we have not invested in this for years," said Congressman Leonardo Gadelha, of the Social Christian Party, a member of the lower chamber's International Relations and Defense Committee.
"Brazil has one of the longest coastlines in the world and we need submarines to patrol and defend this coast," he said.
The Brazilian-French submarine program was agreed to in 2008 by Presidents Luiz Inacio Lula da Silva and Nicolas Sarkozy and is Brazil's most costly defense project.
The air force of Latin America's largest nation is also seeking to renew its fleet with the purchase of 36 fighter jets, a coveted defense contract worth $4 billion initially. Boeing Co., France's Dassault Aviation SA and Sweden's Saab are in the running for the deal.
Brazil has insisted on the maximum transfer of technology in such military contracts to build up its emerging private defense industry that has become a major arms exporter.
On Wednesday, the defense unit of Brazilian planemaker Embraer SA won its first-ever U.S. military contract for the sale of 20 Super Tucano light attack planes for use in counterinsurgency in Afghanistan. ($1 = 1.9771 Brazilian reais) (Editing by Philip Barbara)