The Dolphin class is a non-nuclear (SSK) type of submarine developed and constructed by Howaldtswerke-Deutsche Werft AG (HDW), Germany for the Israeli Navy. It is based on the export-only German 209 class submarines, but heavily modified and enlarged and is thus not seen as a member of the 209 family. The Dolphin boats are considered among the most sophisticated and capable conventional submarines in the world.[citation needed]
Israel signed a contract with ThyssenKrupp to purchase two additional submarines from its HDW subsidiary. The two new boats will be an upgraded version of the old Dolphins, and are going to feature an Air-independent propulsion system, similar to the one used on type 214 submarines. On July 6, 2006, the Government of Germany decided to pay an advance to start the construction, about 170 million euros. The two submarines will cost, overall, around 1.3 billion euros, of which one-third will be paid by Germany. The first one is scheduled to be completed in 2012.
The first two (Dolphin and Leviathan) were donated by Germany, only the third (Tekumah) was purchased by Israel, although Germany still paid for half of the costs. During the first Gulf War, German firms were accused of helping Iraq with its chemical weapons program, which led to protests in both Germany and Israel. To calm Israeli concerns, compensate Israel for economic losses and keep German shipyards occupied[citation needed], then Chancellor of Germany Helmut Kohl decided to donate the two submarines. The Dolphins have replaced the aging Gal class submarines, which had served in the Israeli navy since the late-1970's.