A little less than a month after it was reported that President Javier Milei announced the intention to move forward with the acquisition of submarines manufactured by Naval Group to equip the Argentine Navy, it has been indicated that the government is seeking to obtain financing from Paris in order to carry out the operation, which would allow the obstacle represented by the country’s budgetary limitations to be reduced in order to reinforce its fleet. Particularly, at the time the intention to add three new Scorpène was revealed, the amounts stated for that purpose in the Public Credit Operations Annex revolved around 2.3 billion euros.
The news in question was revealed by the outlet Infobae, after interviewing Laurent Mourre, sales director of the aforementioned French company. Gathering some of his statements: “These are complex processes due to the complexity of the products and of the acquisition process, and they are expensive. So, what I can confirm is that the Argentine government wants to buy submarines (…) It involves many aspects. The first is fundamental for many countries, for almost all, and it is the economic one. It is something very sensitive in Argentina, because it is a nation that is gradually emerging. The economic situation is improving, but it is still very cautious regarding public spending.”
In this sense, the representative of Naval Group indicated that one of the main factors to be evaluated will be the number of specific requirements for the platform with which the Argentine Navy arrives at the negotiating table, considering that this will impact the final costs per unit. In addition, it was indicated that it will also have to be defined whether construction would be carried out on French territory, or whether, on the contrary, the government would seek to move forward with an agreement that also involves the local industry.
The latter has been the model chosen by Brazil to begin incorporating its own fleet of new submarines of this class, with work carried out at the Itaguaí Naval Base and a body of its own workers, although in the event of following a similar path, Argentine local infrastructure would require significant investments added to the cost of the units themselves. In the hypothetical case that this is the route chosen, the main party pointed out on paper by Mourre himself would be Tandanor, a shipyard that in his view is still not in conditions to devote itself to the construction of these submarines.
Regardless of these particularities, the sales director consulted by the aforementioned outlet indicated that there are multiple ways of financing the program, aiming so that Argentina would not have to pay the entire cost of it immediately. Following that line, he highlighted the highly relevant role that the government currently led by Emmanuel Macron would have, who would have to approve in the last instance the agreements reached based on profits, interests, and the relationship with Buenos Aires. In particular, it is reported that the mechanism normally used for this type of circumstance tends to be that of an export credit, in which Paris would provide payment guarantees with specific conditions.
Regarding this, Mourre stated: “The geostrategic relationship between Argentina and France is excellent. I believe we are in a world with great changes. It is very important that France consolidate the relationship with some countries that are outside the historical sphere (…) The financing conditions, which do not depend on Naval Group, but the French state can indeed have a relevant role, because it can give a guarantee for the financing.”
Finally, it cannot go unmentioned that although prices and financing mechanisms are not yet fully defined, it is imperative for the Argentine Navy to move forward in an acquisition program to recover submarine capability; with political support that is sustained in the long term. It is a process that has already been underway for years, whose initial trigger took place after the loss of the submarine ARA San Juan S-42 and its crew in a tragic accident, which implied that the institution ceased to have the only operational unit it had. In addition to the Scorpène class, previous evaluations also pointed to the possibility of reinforcing with the Type 209NG models, an offer that was presented by the German shipyard TKMS but that now appears to be relegated in favor of the French competitor.
*Images used for illustrative purposes
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