The federal government denied Buenos Aires Province the authorization required to take out a USD 270 million international loan for a sewage treatment plant serving La Plata, Berisso and Ensenada. The decision left a project designed to address historic pollution in the Río de la Plata basin without a defined funding source and moved the dispute between Javier Milei and Axel Kicillof from the budget arena into a judicial case.
The federal position was formally filed with Federal Court No. 4 in La Plata, overseen by Alberto Recondo, in a document signed by Undersecretary for International Financial Relations Martín Tolivia. The Economy Ministry argued that the federal government was not required to approve every provincial request. As guarantor of international loans, it said, it must prioritize projects according to national needs and the limited quotas available from each multilateral institution.
The document offered Kicillof's administration three alternatives: fund the plant with provincial resources, find financing without a federal guarantee, or amend existing loans to include the project. It also said available amounts had to be distributed among the 24 jurisdictions and the national state. According to Economy Ministry figures, Buenos Aires already held about USD 2.241 billion in international loans and had roughly USD 756 million still awaiting execution.
The provincial Infrastructure Ministry replied that the project's scale made those options unviable within the ordinary budget. The plant was estimated to cost ARS 450 billion, equivalent to 43% of the capital spending of the ministry led by Gabriel Katopodis and 70% of the credits assigned to Direct Real Investment. Paying entirely with provincial funds would force the government to concentrate most investment on a single project.
That shift would affect drinking-water, sanitation, hydraulic, energy, road and other infrastructure works. As of June 2026, the province managed 17 international operations totaling USD 2.455 billion: USD 1.9578 billion from institutions and USD 497.4 million in provincial counterpart funds. Accumulated disbursements reached USD 1.1756 billion, and at least ten operations required authorization from the federal Economy Ministry.
The province worked with the IDB, World Bank, CAF, EIB, KFAED and FONPLATA on services and infrastructure. In addition to the sewage plant, pending projects included sustainable development in the San Francisco and Las Piedras stream basins, involving a tunnel and relief conduits. Four loans nearing expiration required extensions, including a water treatment plant and pipe replacement for La Plata, Berisso and Ensenada; another four expired in 2027.
The refusal contrasted with 18 authorizations granted by Luis Caputo to ten provinces for an estimated USD 1.973 billion in investment, none of them to Buenos Aires. Guarantees covered programs in Jujuy, Salta, Córdoba, Santa Fe, Mendoza, Entre Ríos, Neuquén, Chaco, Río Negro and Misiones. They included USD 50 million from the IDB for productive development in Salta, USD 140 million from FONPLATA for water in Mendoza and USD 75 million from CAF for a similar project in Córdoba.
The federal government presented that distribution as management of scarce resources; the province viewed it as a blockade forcing it to abandon the project or displace much of its capital budget. The case before Judge Recondo became the next arena for a decision while the USD 270 million guarantee and extensions for other loans remained pending. Until a ruling or an alternative source emerged, the Greater La Plata plant remained technically designed but financially stalled.
