STOCKHOLM, Nov 10 (Reuters) - Sweden is closer to

building new nuclear reactors than it has been for 40 years,

utility Vattenfall's CEO said on Monday, after a group of large

industrial firms agreed to invest 400 million Swedish crowns

($42.5 million) into small modular nuclear reactors.

Industrikraft, a group of 17 industrial companies, including

SKF, Volvo Group and Volvo Cars

, has agreed to make the investment into Videberg

Kraft, a company set up to facilitate the building of several

small modular reactors.

The group plans to later take a 20% stake in Videberg Kraft,

it said in a joint statement on Monday.

Vattenfall is planning to build between three and five small

modular reactors at its existing Ringhals plant in Varo,

southwest Sweden, to provide a total output of around 1,500 MW.

Vattenfall CEO Anna Borg said the announcement was an

important vote of confidence in new nuclear power in Sweden.

"We are closer now than we have been in 40 years and if it

is up to us, it will happen," she told reporters, adding that

the final decision on the investment was still years ahead.

Vattenfall has shortlisted Britain's Rolls-Royce SMR,

and U.S. group GE Vernova ( GEV ), as the two possible suppliers

of the nuclear reactors, and Borg said a decision on which one

would come in 2026.

In total, Sweden is planning up to 12 new nuclear reactors

by 2045, which could cost around 400 billion Swedish crowns ($39

billion), with the government offering to share some of the

investment risks.

($1 = 9.4155 Swedish crowns)