In a significant move, Russia is set to finalize a contract with Cuba that will grant the island nation a $60 million credit for fuel purchases, as revealed by a source within the Cuban regime on Sunday. Julio Antonio Garmendía, Cuba's ambassador to the Eurasian nation, informed the Russian news agency Sputnik that following the signing of the necessary agreements between both governments, the contract enabling the credit's implementation will be formalized in the coming days.
Garmendía further disclosed that, in addition to the fuel credit, Russia will donate an extra $2 million to acquire crucial parts needed to restore the critically deteriorated national electro-energy system (SEN). This system has been suffering due to the severe wear and tear of the country’s outdated power plants.
Russian assistance comes as a lifeline for Cuba amid its severe and ongoing energy crisis, characterized by widespread and frequent blackouts, fuel shortages, and restricted public transportation. Back in November 2024, just weeks after the collapse of the SEN that left Cuba without power for nearly four days, Moscow pledged to supply 80,000 tons of diesel fuel to the island, valued at over $60 million, as an emergency measure to ease the energy sector's dire situation.
In March, Russian President Vladimir Putin approved modifications to the credit agreements between the two nations, aimed at restructuring Cuba's debt and offering more favorable repayment terms. The protocols sanctioned by Putin are tied to state credit agreements offered by Russia to Cuba from 2009 to 2019 for hydrocarbon purchases. According to official Russian government data, Cuba's accumulated debt under these agreements totals $277.2 million.
The terms extended to Havana include the option to repay the debt in rubles, postponement of the initial payment schedule set for 2023-2027 to the period from 2028 to 2040, and adjustments in penalty rate calculations for late payments. Russia views its assistance to Cuba in securing crude supplies as a strategic move to strengthen Moscow's political foothold in Latin America.
This decision by Putin underscores the close bilateral relationship between the two allied nations and aims to alleviate the economic and energy challenges faced by the Cuban regime. In 2022, Putin enacted legislation allowing Cuba to defer debt payments, following loans provided since 2006 amounting to approximately $2.3 billion.
Impact of Russian Aid on Cuba's Energy Crisis
How will the $60 million fuel credit from Russia benefit Cuba?
The $60 million fuel credit will allow Cuba to purchase much-needed fuel, which is expected to help alleviate the country's severe energy crisis marked by frequent blackouts and fuel shortages.
What additional support is Russia providing to Cuba?
In addition to the fuel credit, Russia is donating $2 million to help Cuba acquire essential parts to repair its national electro-energy system, which is in critical condition.
Why is Russia aiding Cuba's energy sector?
Russia's aid to Cuba's energy sector is part of a strategy to reinforce its political influence in Latin America and to support an allied nation facing economic challenges.