The European Space Agency (ESA) has awarded a contract to Astrium to continue the development of its Ariane 5 Midlife Evolution (A5 ME) launch vehicle.

The €112m contract will allow Astrium to design sub-systems for the A5 ME launcher, which is an upgraded version of the Ariane 5.

A5 ME has been a major ESA programme implemented by the Ministerial Council in 2008, aimed at modernising the existing Ariane 5 launcher.

Astrium Space Transportation chairman, CEO Alain Charmeau, said: "This €112 million contract underscores that maturity of the Ariane 5ME programme."

"As prime contractor, Astrium will continue to coordinate the work of more than 30 companies across Europe, with whom we have already completed major phases in the development of a launcher that anticipates the needs of both commercial and European institutional markets," Alain said.

Ariane 5 ME features include an upgraded upper stage equipped with SNECMA’s Vinci restartable cryogenic engine and an extended nose fairing, which will allow the launcher to carry larger and heavier payloads.

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The new launcher will enhance the payload-carrying capability by 20% to 12,000kg by placing two satellites weighing 5t in the geostationary orbit in a single flight, with no additional production cost.

ESA had awarded a €150m two-year development contract to Astrium in December 2009 followed by validation of Ariane 5 ME after its Preliminary Design Review, which allowed Astrium to develop the project further.

ESA said that the final development phase of the programme is expected to be approved by its member states at the Ministerial Council meeting scheduled for November this year.

Following the decision, Astrium and its partners will test the Ariane 5 ME launcher from 2017.