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Russia revitalizes cooperation with Cuba
On February 4, Cuban leader Raul Castro will end his first visit to Moscow since 1985. During his weeklong stay in Moscow, the Russian and Cuban leaders confirmed their intention to revitalize bilateral relations.
Moscow has agreed to provide over $350 million of loans and other assistance to Cuba and to set up several promising Russian-Cuban ventures.
Loans and aid
Economic relations between Russia and Cuba were severed in the early 1990s, but in the early 2000s the two countries expressed a desire to resume and expand cooperation.
The first move toward that end was the visit by a Russian governmental delegation to Cuba in September 2006, after which Cuba was granted a $355 million loan for the acquisition of Russian equipment in 2006-2008. By now, Havana has spent nearly all of the money.
This is why the intergovernmental commission co-chaired by Deputy Prime Minister Igor Sechin started working last year, and President Dmitry Medvedev visited Cuba in November 2008.
During his visit to Moscow this year, Raul Castro negotiated state loans worth over $300 million to buy and/or lease Russian agricultural, construction and other equipment, including a Tu-204SE transport plane in addition to the three Tu-204 and three Il-96 civilian planes supplied under the previous loan.
Cuba will also spend $20 million on repair and spare parts for the military equipment it bought during the Soviet era.
Russia has pledged to supply two batches of grain, 25,000 and 100,000 metric tons respectively, worth $37 million to Cuba free of charge.
The two countries have also signed several agreements to establish joint ventures.
Russia's largest truck producer, KamAZ, will not only sell its trucks to Cuba, which will pay for them with Russia's loans, but also establish an assembly plant jointly with Cuba's Tradex, thereby increasing its sales in that country.
Russian state-controlled airline Aeroflot will set up a joint venture with Cubana de Aviacion.
The United Shipbuilding Corporation and Sovcomflot, Russia's largest shipping company, are also considering joint projects with Cuba.
Russian power producer Inter RAO UES has agreed with Cuba's Union Electrica to establish a joint venture for thermal and hydro power generation, and to build a 600 MW thermal power plant in Cuba.
Since most Cuban power plants use oil, Russian crude producers may soon get a foothold in the Cuban oil and gas sector.
A decision was made in the fall of 2008 to establish a National Oil Consortium at the initiative of Deputy Prime Minister Igor Sechin, who is responsible for Russia's fuel and energy sector and relations with Cuba.
Russian oil companies will use the consortium to implement their foreign projects. In late January 2009, the consortium signed a memorandum of cooperation with Cuba Petroleo, which provides for joint geological exploration in the Cuban economic zone of the Gulf of Mexico.
Cuba is to turn over available geological information about more than a dozen offshore blocks to the Russian partners. Its processing will take six months, after which the parties will decide on the feasibility of drilling additional exploration wells to be paid for by the Russian partners.
Besides, Russia and Cuba can beneficially develop cooperation in biotechnologies, pharmaceutics, tourism and communications. Sechin said Cuba and Russia planned to set up a joint pharmaceutical company to develop and produce cancer and other medicines.