Russian aid to Cuba suddenly balloons in size
All loans and aid to Cuba, agreed on Friday between Dmitry Medvedev and Raul Castro, now total $354 million rather than the planned $20 million.
Deputy Finance Minister Sergei Shatalov reported that a state loan to Cuba to purchase Russian agricultural and construction equipment as part of an agreement endorsed together with his Cuban counterpart, amounted to $150 million, which Cuba will get over a period of nine years at 7% p.a. (the first two years will be a grace period, while during the next seven years the body of the debt will be repaid).
Another agreement is expected to allocate $20 million for 10 years at 5% p.a. (with four grace years), Shatalov said. He said agreement had been reached for Cuba to get another $100 million to lease Russian equipment. The deal will be formalized shortly.
According to a Foreign Ministry source, it was planned previously to grant Cuba only a $20 million loan, but unexpectedly, a few hours before the deal was signed,
Medvedev and Castro agreed on the allocation of a further $150 million and $100 million.
The sides also agreed on a VEB export loan worth $47 million, to be used by Ilyushin Finance Co. (IFC) to supply a Tu-204SE cargo airliner to Cuba's Aviaimport SA.
According to Andrei Lipovetsky, an IFC spokesman, this is the fourth Tu-204 being exported to Cuba. Russia has already delivered three Il-96 passenger jets there. This pre-export loan is a way of assisting Russia's aircraft industry, said Andrei Mazurov, a VEB spokesman.
Free food aid for Cuba will total another $37 million, Shatalov said. There are two tranches of 25,000 metric tons and 100,000 metric tons of grain ($7 million and $30 million, respectively). The first is ready for shipment.
The previous Russian loan allocated to Cuba under the 2006 agreement amounted to $335 million. According to Deputy Prime Minister Igor Sechin, who heads the Russian delegation on the intergovernmental commission, it has virtually all been spent.
A $20 million loan is being granted to repair and buy spare parts for military equipment supplied during the Soviet era, said a Defense Ministry source.
Vyacheslav Davidenko, a Rosoboronexport spokesman, said military technical cooperation with Cuba is small scale, but steady.