Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

$50m Loan to Cuba Hinges On Old Debt

Russia would give Cuba $50 million in credit in 2001 if Havana serviced its Soviet-era debt, the Russian government said Monday.

The loan is part an extended economic and technical agreement originally signed by the two governments in 1993, which Russia's Prime Minister Mikhail Kasyanov had prolonged into 2001, the government said in a statement.

Kasyanov told the Finance Ministry to stop the new credit if Cuba failed to keep up payments of the old debt. The statement did not make clear if Cuba has been servicing its debt. The government officials were not immediately available for comment.

The new credit is earmarked to build electrical transformers and 200 kilowatt power stations. Portions would also be used to modernise sugar refineries and to establish a single air traffic control system.

Russian President Vladimir Putin visited Cuba last week but failed to reach agreement with Cuban President Fidel Castro on the enormous Soviet-era debt, which Russian media estimate at around $20 billion.

Moscow wants repayment but Havana says Russia should write it off as "compensation" for damages caused to Cuba's economy by the abrupt Soviet fall.