Rich nations use Cuba debt in hopes of prying open opportunities
By Marc Frank
HAVANA, June 6 (Reuters) - Cuba's long-term trading partners are using debt forgiveness, swaps and new financing to try to win investment opportunities on the island before U.S. companies turn up following its detente with Washington.
France, Italy, Japan, Spain and Russia are among the countries seeking to convince Cuba to sign contracts with their companies for projects to update the Communist-led nation's creaking infrastructure, in return for writing off debt.
In December, Cuba struck a general accord with the Paris Club of wealthy nations to forgive $8.5 billion of $11.1 billion in defaulted debt and it has since reached follow-up bilateral deals with most members.
Spain and France have pledged more than $700 million in outstanding Cuban debt for development projects on the island and Italy and Japan are expected to follow suit this month, their companies in line for any new business.
France, which is Cuba's largest creditor in the Paris Club, agreed in February to drop more than $225 million of outstanding debt in a swap arrangement.
In return, Cuba opened an account in which the same amount will be deposited and used to finance investments that both countries agree on.
"If there is a proposed project, for example a joint venture, the Cubans can finance their part more quickly with this money in their account. It is an incentive to speed up decision making," said a European diplomat with knowledge of the negotiations.
Cuba says it needs foreign investment to perk up its anemic economy but it remains cautious when it comes to finalizing new ventures. To date, no projects have been announced linked to any of the finance agreements. Continuación...