Australia's National Reconstruction Fund Corporation (NRFC) will provide AU$245 million (US$172 million) in debt financing to Austal Defence Australia (ADA) to build and equip new facilities for the Australian Army's eight landing craft heavy (LCH) vessels, Austal confirmed on Wednesday, October 21.
The funding is for building and fitting out further shipbuilding facilities dedicated to the LCH programme at the Australian Marine Complex (AMC) in Henderson, Western Australia. Modules will be manufactured at both Austal's existing and new facilities.
Assembly and launch of the approximately 100-metre vessels will take place at the AMC.
Under the strategic shipbuilding agreement and the associated LCH tasking statement, the Government of Australia will pay all funding costs associated with the NRFC loan facility. Austal said this arrangement would limit its working capital needs.
The investment depends on the finance documents being finalised and the customary conditions precedent being met. Barrenjoey and Norton Rose Fulbright advised Austal on the financing.
"NRFC investment in LCH manufacturing builds industrial depth that can be re-deployed across future naval programs," said NRFC CEO David Gall. "It will help to embed vital sovereign naval assembly and quality assurance capabilities onshore, reducing our reliance on offshore shipyards."
ADA was awarded the LCH construction contract, worth approximately AU$4 billion (US$3 billion), on February 20, 2026. Delivery of the eighth and final vessel is scheduled for 2038.
The Australian Government has said the first tranche will be built at the AMC's common user facility before the programme moves to a permanent location.
The landing craft are based on a design selected in November 2024. Each vessel will have a displacement of approximately 3,900 to 4,000 tonnes and will be able to transport more than 500 tonnes of personnel, vehicles and equipment.
ADA is also building 18 Landing Craft Medium vessels at Henderson under a AU$1.029 billion (US$720 million) contract, with the final vessel due in 2032.
