25 Aug 2023 09:44

Russia grants Cuba deferral on loan to build power plants

MOSCOW. Aug 25 (Interfax) - Russia has granted Cuba the option of deferring payments on a loan to build power plants, according to amendments to the 2015 intergovernmental agreement that were published on the official website for legal acts on Thursday but signed back in April.

Cuba has been granted the option to defer payment of interest in the amount of about 1.4 million euros that was initially due by February 28, 2022; the amendments call for one payment on June 15, 2025. The amount of interest that Cuba was supposed to pay from March 1 to the end of 2022, about 2.2 million euros, can now begin to be paid in the period from July 15, 2028 to mid-December 2040.

Payment of the principal debt, along with some deferred payments and capitalized interest, which was supposed to take place from January 2023 to the end of 2027, has now also been pushed back to the period from mid-June 2028 to mid-December 2040, with payments to be made every six months in this period.

Furthermore, payments on the loan will now be made in rubles, rather than in euros as before, the document stipulates.

The agreement to grant Cuba a government export loan of up to 1.2 billion euros at 4.5% interest was signed in 2015. The money provided for projects to build generating units at Cuba's Maximo Gomez and East Havana thermal power plants. One 200 MW generating unit will be built at the Maximo Gomez plant and three 200 MW units will be built at East Havana. Russia's Inter RAO-Export was expected to be involved in carrying out the project.

The initial terms of the loan assumed it would be spent in 2016-2024 and that Cuba would repay it in ten years with the first payments to begin after the launch of the generating units, or by February 1, 2025. However, there have not been any reports since then about work on the project having begun.