Amidst the frequent power outages plaguing the island, Cubans are left wondering about the fate of the €1.2 billion that Russia once promised for the construction of new power plants. These blackouts, often labeled as "situations," "contingencies," or "energy emergencies," are routinely excused by Cuban leader Miguel Díaz-Canel, but the question remains: "Where did the €1.2 billion go?" This query haunts those who recall the 2015 announcement, which touted the Russian credit as a major development.
Back in October 2015, the state-run media outlet Cubadebate celebrated the news, proclaiming that Cuba had secured a Russian loan for building power plant units. According to the Russian agency RIA Novosti, the funds were earmarked for constructing energy blocks at two thermal power plants. The plan was to erect four 200 MW generation units for the Máximo Gómez and Este Habana power plants, with Russia providing a state export credit of €1.2 billion to finance the project.
A Project Derailed by Financial and Global Challenges
In September 2022, Tatiana Amarán Bogachova, Cuba's Deputy Minister of Energy and Mines, revealed that the Cuban government never accessed the Russian funds. The reason? Cuba failed to secure the required 10% advance payment, amounting to €120 million, to trigger the credit line. "The funds were never utilized. We couldn't restart the project, and credits are loans, not gifts," Amarán explained, underscoring that the money was strictly allocated for this endeavor.
The groundwork, conducted by Russian and Cuban firms from 2016 to 2019, took longer than expected due to its complexity, according to Amarán. The global pandemic in 2020 and Cuba's worsening economic crisis further stalled progress. "We couldn't gather the necessary advance for the Russian side to release the credit," she commented, noting that the government had prioritized other issues over the years. The subsequent Russia-Ukraine conflict only added to the project's delays.
Russia's Financial Support and Cuba's Mounting Debt
Between 2006 and 2019, Russia lent Cuba $2.3 billion for various projects, including energy, metallurgy, and transportation. However, Cuba failed to maintain these power plants properly. In February 2022, Russia's lower house of Parliament extended the repayment terms of these loans until 2027. Since early 2020, Cuba had nearly halted its loan repayments, thereby increasing its debts to Russian banks and exporters, as reported by Efe.
In March, Russian President Vladimir Putin approved amendments to the credit agreements with Cuba, restructuring the island's debt and offering more favorable repayment conditions. The Russian government’s legal portal confirmed that these protocols, backed by Putin, affected state credit agreements granted to Cuba from 2009 to 2019 for hydrocarbon purchases. According to Russian Deputy Finance Minister Alexei Sazanov, Cuba's accumulated debt under these deals reached $277.2 million.
By September, the Russian government expressed hope that Cuba would overcome its severe economic crisis and hinted at the possibility of new credit lines.