Raúl Castro with Vladimir Putin last year (Kremlin)

Russia offers to finance $4bn in Cuban development schemes

29 September 2016 | By GCR Staff 0 Comments

Russia has offered to embark on a spectacular renewal of its economic relations with Cuba, based on 55 projects with a total value of some $4bn over the next four years, and has also agreed a cooperation agreement in the nuclear power sector.

Nikolai Podguzov, Russia’s deputy minister of economics, told the TASS news agency this week that the projects would prioritise energy, railway infrastructure, IT and aerospace.

All would involve the export of equipment from Russia to Cuba, and would fit with Moscow’s drive to move the economy away from the export of hydrocarbons towards higher value manufactured goods.

Podguzov, who was speaking after a meeting in Havana on Monday, said: “The key issue for all these projects is securing their financing.” He added that the bulk of the funding would be provided by Russian banks and safeguarded by guarantees from the Agency for Export Credit and Investment Insurance products.

Some of the schemes are already under way. For example, Sinara Group, a private conglomerate based in Yekaterinburg, is to deliver locomotives to Cuba next year.

Transmashholding, a Moscow-based railway equipment maker, will export passenger railcars, and energy utility Inter RAO plans to install generators in the Maximo Gomez and East Havana thermal power plants.

“The key issue for all these projects is securing their financing”– Nikolai Podguzov, Russia’s deputy minister of economics

RusHydro, the world’s second largest hydro power company, is participating in a tender for the construction of 16 small dams. Ivekta, a private company based in Dubna, is to supply roadbuilding machinery and Uralkhimmash, a Yekaterinburg maker of heating and refrigeration equipment, is to build a park for the storage of liquefied natural gas.

In return, Cuba is planning to capitalise on the strength of its health sector by exporting pharmaceuticals to Russia.

Meanwhile, the two countries have also signed an agreement to cooperate on civil nuclear energy.

José Fidel Santana, a deputy minister for science and technology, said the deal would give both countries a framework to begin developing bilateral projects.

The deal also includes the creation of Cuban nuclear research organisations.

Russia acted as Cuba’s economic patron during the Cold War, during which time the island accumulated a debt of some $32bn, 90% of which was written off by Russia in 2014.

Image: Raúl Castro with Vladimir Putin last year (Kremlin)

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