Russia Offers Cuba 55 Cooperation Projects
Russia has presented proposals for 55 projects of bilateral cooperation with Cuba with a total value of around USD 4 billion, reported Deputy Russian Economics Minister Nikolay Podguzov in an interview with the TASS news agency on Monday.
“Our offer to Cuba includes 55 projects for implementation in 2016-2020 with a total value of almost four billion dollars,” said the Russian deputy minister about the Havana Working Group on Trade and Economic Cooperation and Priority Projects of the Russian-Cuban Intergovernmental Commission for Trade, Economic and Science and Technology Cooperation.
Drivers of Growth
“Now that the commodity markets have changed, we need to search elsewhere for new drivers of economic growth and move away from the commodity export market,” said the deputy minister. He added that Russia’s New Economic Agenda is complementary to the Cuban economy.
“We can provide Cuba with the industrial equipment and infrastructure solutions that will pave the way for the island’s economic growth,” said the official. According to him, “These are important projects to take the Russian economy forward, too.” According to the minister, the projects therefore “represent areas of mutual interest, which could lay the foundations for a new level of Russian-Cuban economic relations.”
“In the first nine months of this year, after a decline, the trade and economic relations between the two countries have improved, with a significant increase in commodity turnover, and implementing these priority projects will help consolidate this positive trend,” said the deputy minister.
Priority Areas
According to Podguzov, priority projects include those in the energy, railway infrastructure, information technology, and aviation sectors: areas where “substantial work is being done.” All projects involve the export of Russian goods to Cuba. The Sinara Group plans to supply locomotives with a likely start date in 2017. The transport engineering company Transmashholding will provide passenger train cars. INTER RAO plans to take part in the construction of power units for the Maximo Gomez and East Havana thermal power plants (TPP), and modernize existing power units in Cuban TPPs. RusHydro is participating in a tender to build 16 small hydropower plants. Ivekta hopes to supply automotive and road-machinery equipment. Rosinformexport has put together a project on the creation of an e-government in Cuba, and Uralkhimmash has plans to build a liquefied petroleum gas storage park.
At the meeting, Cuba also provided information on a number of projects that they would like to bring to fruition, primarily in the pharmacological sector. Cuba has a number of drugs which it believes have the potential to find a market in Russia. Podguzov promised to organize the interaction needed with the Russian Ministry of Health and the Ministry of Health of Cuba to facilitate cooperation in this sector.
The Key Issue
“The key problem for every project is finding the funding,” said the deputy minister. According to him, this is most often achieved through loans from Russian banks under guarantees of the Russian Agency for the Insurance of Export Credit and Investment (EXIAR).
Podguzov said that they would need to cooperate with EXIAR to work out “the kinds of guarantees that will allow Russian banks to provide loans for the purchase of products and thereby carry out transactions.” According to him, “EXIAR has already supported quite an extensive range of projects.” The official hopes that with the cooperation of the Russian agency, it will be possible to start carrying out projects in the near future, which will lead to improvements in certain sectors of the Cuban economy.
All in all, the deputy minister sees great potential for Russian industrial exports in Latin America, “both in terms of equipment, and in aviation and energy industry projects.” The deputy minister believes that countries in the region “could become potential buyers of Russian products, but it is important to properly work out financing mechanisms for the projects, as Russia cannot always offer competitive conditions, particularly in terms of pre-export financing.”
Source: http://tass.ru/ekonomika (Russian)
