HomeInternationalRussia extends $355 mln credit line to Cuba

Russia extends $355 mln credit line to Cuba

By Anthony Boadle

Russia on Thursday extended a $355 million credit line to its former Cold War-era ally Cuba to buy cars, trucks and other equipment and services during a visit by Russian Prime Minister Mikhail Fradkov.

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ficials also signed an agreement to restructure $162 million in debt run up by Cuba with Moscow since the demise of the Soviet Union in 1991.

The highest-ranking Russian official to visit Cuba since President Vladimir Putin in 2000, Fradkov met with acting Cuban President Raul Castro, who temporarily took over from his brother, Cuban leader Fidel Castro, after he underwent intestinal surgery in late July.

Russia says Cuba still owes it $26 billion from trade and subsidies during the Cold War days, but that debt issue has been set aside for the moment, a Russian diplomat said.

Restructuring Cuba’s new debt and extending the Russian credit line to finance trade with the communist-run island was the main aim of Fradkov’s visit, said the diplomat, who spoke on condition of anonymity.

Russian-Cuban trade has steadily declined since the Soviet Union collapsed and Cuba turned to other countries such as Spain, Canada, China and Venezuela. Cuba’s need to replace a vintage fleet of Soviet-era aircraft, however, has opened up new possibilities between the two former allies.

Russia’s 2006 budget allocated $325 million for Cuban trade guarantees that would go largely to cover private bank financing for the purchase of Russian commercial aircraft.

Ilyushin Finance Co., Cuba’s state-run Aviaimport S.A. and Cubana de Aviacion airlines signed a $110 million agreement in 2003 for delivery of two long-haul Ilyushin Il-96s.

Upon delivery of the two planes this year, flag carrier Cubana ordered two more wide-bodied Il-96-300s and three medium-range Tupolev Tu-204s with an estimated value of $250 million, and indicated it was in the market for 20 to 30 more medium-range and short-range planes.

“Cuba urgently needs to replace its old Russian-made airplanes and could buy $100 million a year in aircraft from us,” the Russian diplomat said. He added that the plane purchases would be privately financed. — Reuter

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