The government of Javier Milei wants three new-generation Scorpene submarines from France, but an elaborate financing deal still stands between Buenos Aires and a signed contract.
Argentina’s return to the underwater game
Argentina has not had a fully operational submarine force since 2017, when the ARA San Juan went missing with 44 sailors on board. The loss shattered public confidence and left the Armada de la República Argentina effectively blind beneath the surface of the South Atlantic.
Today, only the ageing ARA Salta remains in service, and mainly as a training tool. Crews have had to travel to Peru to maintain basic submarine skills, a costly workaround that underlines how far Argentina’s underwater capability has eroded.
Buenos Aires now sees new submarines as a strategic tool to protect its waters, not as a prestige project.
President Javier Milei’s administration has made a political choice: it wants three French Scorpene submarines in an “Evolved” configuration, derived from the Brazilian Riachuelo class but with updated technology. The aim is clear: restore credible submarine power, with enough endurance and firepower to patrol vast stretches of the South Atlantic for weeks at a time.
Why the Scorpene matters for Buenos Aires
The Scorpene Evolved variant offers a substantial leap over Argentina’s current capabilities. It is designed for coastal and blue-water operations, with a focus on stealth and long patrols.
- Lithium-ion batteries for better submerged endurance
- More than 70 days potential deployment at sea
- Enhanced automation to reduce crew workload
- Modern sonar and combat systems for tracking ships and submarines
For Argentina, these features translate into real-world missions rather than abstract military power. The navy wants to:
Submarines are not just offensive weapons; they are political signals, quietly reminding neighbours and rivals that a country is watching.
With a modern underwater fleet, Argentina would again be able to monitor shipping routes, gather intelligence and complicate the calculations of any force operating in the South Atlantic.
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The financial minefield: export credit or nothing
The obstacle is not political will, but money. Argentina has earmarked around $2.31 billion in its 2025 budget for what it calls the “recovery of submarine capability”. Yet the state cannot pay for the submarines upfront.
Instead, Buenos Aires and Paris are discussing an export credit scheme. Under this model, French and possibly international banks would provide long-term loans, backed by a guarantee from the French state. Argentina would then repay over many years.
The French guarantee is the keystone: without it, interest rates and risk premiums could make the deal unworkable for Buenos Aires.
French export finance usually comes with conditions. These can touch on repayment schedules, macroeconomic stability and sometimes industrial offsets. In Argentina, where public spending remains politically explosive after years of inflation and austerity, every peso of defence investment is highly scrutinised.
| Key element | Argentina–France submarine deal |
|---|---|
| Number of submarines | 3 Scorpene Evolved |
| Estimated budget allocation | $2.31 billion (for 2025 start) |
| Financing mechanism | Export credit with French state guarantee |
| Main supplier | Naval Group (France) |
Build in France or rebuild Argentina’s shipyards?
Beyond financing, Argentina faces a strategic industrial choice. It can opt for a faster, simpler route: have all three submarines built in France, then focus local effort on maintenance, training and mid-life overhauls.
Or it can attempt something much more ambitious: revive domestic submarine construction at its Tandanor shipyards in Buenos Aires, which would require new infrastructure, technology transfer and specialised training.
The Tandanor option: long-term vision, short-term cost
Brazil offers a recent example. In Itaguaí, outside Rio de Janeiro, Brazilian industry partnered with Naval Group to build Scorpene-class submarines domestically. The result is a local ecosystem focused on design, assembly and long-term support, as well as a separate nuclear-powered submarine project.
Argentina could try to replicate a part of this model, but it would come with substantial up-front costs and a long learning curve. Rebuilding a submarine industrial base is not a three-year task. Realistically, it stretches over a decade or more.
Choosing local construction means accepting higher near-term expense in exchange for long-term industrial sovereignty.
Milei’s liberal economic stance complicates matters. His government has pledged to cut public spending and reduce state intervention, yet a Tandanor-based submarine programme would demand sustained investment, state backing and protection from political swings.
Naval Group’s global stakes in the deal
For France’s Naval Group, Argentina is more than just another customer. The company has faced setbacks on several key markets for conventional submarines.
In Poland, Warsaw chose Sweden’s A26 Blekinge design over the Scorpene for its Orka programme, tying itself closer to a “Baltic bloc” with Stockholm and putting emphasis on local shipyard participation. In Canada and Norway, German, South Korean and British rivals have taken leading positions in major naval programmes.
On the brighter side, the Netherlands selected Naval Group in 2024 to replace its Walrus-class boats with four new “E-Barracuda” submarines. That contract, confirmed later in the year, includes wide-ranging cooperation with Dutch firms such as Nevesbu and RH Marine on complex subsystems and automation.
If Argentina signs, Naval Group will show that it can win outside Europe and remain a heavyweight in conventional submarine geopolitics.
Paris also has something to prove. Converting political alignment with Buenos Aires into a financed, executable programme would demonstrate that France can still use its export-credit tools effectively at a time when global competition in defence sales is fierce.
How export-credit defence deals really work
Export credit for defence is often opaque, yet it shapes who can buy advanced hardware. In simple terms, banks lend money to the buying country, not to the shipbuilder. The exporting state then guarantees part of that loan, reassuring lenders that they will be repaid even if the buyer experiences financial turbulence.
For Argentina, this could mean:
Such agreements can survive changes in government, which gives the navy more certainty that the submarines will actually be delivered. At the same time, they lock future budgets into repayment commitments, which opponents of the deal may criticise.
What new submarines would change in the South Atlantic
If the deal moves forward, Argentina could start shifting its maritime security posture within a decade. New submarines would allow the country to shadow foreign fishing fleets without being detected, track surface vessels near sensitive areas and discreetly map undersea routes or energy infrastructure.
For regional neighbours like Brazil, Chile and Uruguay, an Argentine return beneath the waves would not necessarily be destabilising. All have their own submarine or patrol capabilities. Instead, the main impact would be felt by extra-regional actors operating far from their home bases, including China’s distant-water fishing fleet and any navy surveilling the South Atlantic from afar.
For the UK, which maintains a garrison and naval presence around the Falklands, an Argentine submarine resurgence would be a factor to watch closely. It would require more anti-submarine patrols and updated contingency planning, but within a framework already shaped by NATO standards and regular exercises.
Key notions: lithium batteries and “conventional” submarines
Two technical points often cause confusion. First, lithium-ion batteries. Compared with classic lead-acid batteries, lithium systems store more energy, recharge faster and weigh less. For a submarine, this means longer silent running underwater without needing to snorkel or use diesel engines, which are noisy and easier to detect.
Second, “conventional” submarines. The term simply refers to boats without nuclear propulsion. They rely on diesel engines and batteries, or on hybrid systems such as air-independent propulsion (AIP). Nuclear submarines can stay submerged for months, but they are far more expensive and politically sensitive. For a country like Argentina, even a high-end conventional submarine can cover national needs at a fraction of the cost of a nuclear fleet.
Whether Argentina manages to secure financing or not, the current negotiations give a rare window into how middle powers think about the sea, technology and debt all at once. The outcome will shape not only shipyards and budgets, but how quietly – or loudly – the South Atlantic is patrolled in the coming decades.
Originally posted 2026-02-11 14:35:53.