Spanish companies and projects in Cuba have an investment with an additional means of support of more than 400 million dollars, derived from Cuba’s debt written off by Spain a few years ago. The use of that alternative was promoted by representatives of the two countries in a business forum recently held in Madrid.
When analysing the financial instruments available to the companies from his country interested in investing in the Cuban economy, General Director of the Treasury Carlos San Basilio Pardo presented the advantages of the Collateral Fund, which was created in 2016 with the restructuring of Cuba’s debt which Madrid wrote off a year before by virtue of the agreements reached by Havana with the Paris Club.
A binational committee will be responsible for the administration, follow up and assessment of this important capital of more than 400 million dollars, considered by San Basilio Pardo as “a great opportunity for Spanish companies.” The money is granted as a donation only to Spanish companies – including joint ventures – that carry out projects in Cuba.
Cuban Ambassador to Spain Eugenio Martínez explained that the Collateral Fund also arrives at a very opportune time for his country. “Foreign investment is part of the Cuban economy, it is essential,” he said, but the Cuban policy of opening to foreign capital is finding obstacles when negotiating foreign financing.
The credit structure to finance our economy is very difficult; we get a credit, but under very difficult conditions,” the ambassador explained. The U.S. economic blockade has kept Cuba away from important financial institutions, including development banks. For the same reason, the banking interests, when the country gains access to these loans, is usually higher than the international mean.
The restructuring of the debt in the short, medium and long term, the opening of specific financing lines by Cofides and two debt conversion programmes for 415 million euros to facilitate the financing of investments and projects that give a boost to Cuba’s development are instruments that should contribute to intensifying the activity of enterprises on the island, the council has stated in a press release.
This is occurring in a situation in which the Cuban authorities have stated their intention of opening more to foreign investments as a form of growth and economic development. The Economy Ministry has stated the need to get through that means between 2 and 2.5 billion dollars per year, but in 2016 it had only attained some hundreds of millions.
The Cuban ambassador announced at the Iberian-American Business Forum the approval of almost 400 investment projects at present. Out of the total, a bit over a fourth (110) are directed at the tourist industry, one of the few sectors with a booming growth in Cuba since two years ago: in 2015 international arrivals increased by 17 per cent and in 2016 by 14 per cent, while this year has taken off at the same pace.
Out of these 110 tourist projects, 10 belong to major Spanish hotel companies, which “will invest in Cuba in the next years an average of 50 million dollars,” said Martínez. Currently, 60 per cent of the Cuban archipelago’s hotel rooms are managed by Spanish chains.
The president of Cofides, Salvador Marín, also participated in the business forum recently held in Madrid to explain to the entrepreneurs gathered there the investment line opened for Cuba by that Spanish development financing company, complemented with a special line for the Mariel Special Development Zone.
In a scenario in which the Cuban economy has decreased 0.9 per cent and hasn’t been able to achieve a stable growth, the alternatives to revitalise the access to foreign investment capital is opportune, more so if it derives from the renegotiation of debts, as Cuba has already done with several of its principal creditors. (2017)
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