Argentina plans $3.5 billion in borrowing to buy submarines and frigates

Argentina's government has included in its draft 2027 budget plans to take on international loans totaling $3.5 billion to acquire equipment for its naval force, according to the outlet BioBioChile.

The government initiative sent to Congress provides for a $1.2 billion loan to acquire two multimission frigates and another of $2.3 billion to buy three conventional submarines. According to the cited draft, the submarines would be based at the Mar del Plata naval base, 400 kilometers from Buenos Aires, while the frigates would operate from Puerto Belgrano, 600 kilometers from the capital.

The naval purchase comes amid a rebuilding of the military fleet following the sinking of the submarine ARA San Juan in November 2017. In parallel with this external borrowing plan, the current administration has received F-16 fighter jets from Denmark and has moved ahead with the purchase of armored vehicles and military helicopters.

For day-to-day operations, a sovereign debt issue of this size in foreign currency increases the state's external financial commitments in a context of foreign exchange constraints. Whether these international loans go ahead will depend on congressional approval during the budget debate.