The new rules that Cuba has established as part of its “Prioritization” effort are designed to make a serious and positive impact on the Cuban investments process. However, any contemplated investment must be viewed in light of the events of 2020 that will continue to challenge the Island in 2021.
The U.S. government’s increased coercive measures against the island, combined with COVID-19, are two of the most obvious and serious issues, not only for Cuba itself but its relations with other countries. Cuba’s difficulties in obtaining financing and the imbalance between internal and external finances pose additional obstacles. Finally, investment activity worldwide has been chilled by global instability.
Despite these difficulties, Cuba ended the year with completed investments in a wide variety of sectors, where investment is ongoing.
In rice production, the technological assembly and construction of 12 rice drying facilities was completed, while road access was improved along with irrigation to cover 290 hectares. As far as grain production is concerned, four grain processing and drying plants were completed, along with 227 irrigation projects to support the processing of 7,543 grains, citrus fruits and livestock fodder.
Within the food sector, specifically vegetable production, 200 greenhouses were constructed, along with a seed processing plant, and production was restored at 11 bio-factories.
Coffee and cocoa were also a focus for investment, with a cocoa processing plant and warehouses completed, along with honey production facilities and new coconut plantations.
The livestock and logistics sector is one of the sectors most damaged by the country’s difficult economic situation, and is considered of vital importance. During 2020, pasture and fodder for animal feed increased by 6,223 hectares, 32 pig farms were restored, 18 poultry farms created, 31 infrastructure projects completed and storage capacities established for 20,000 tons of raw material. As well, the investment in a bio-fertilizer plant in Santiago de Cuba was concluded.
The hotel sector is of fundamental importance for Cuba’s foreign trade balance and therefore, investment in this sector is an absolute priority. During 2020 as part of the completion of six hotels, 2,210 new rooms were built.
In media, the country is working to convert is flat presses and a graphics plant was completed in the province of Villa Clara, to handle printed press for a large portion of the country, while also supporting the non-periodical sector.
Transportation is a key strategic sector, especially railways, as they are envisioned to become the backbone of commercial and passenger transportation on the island. Progress in 2020 included substantial repair and new technology upgrades through a joint investment process with Russia, which is investing more than $2 billion dollars to completely modernize the Cuban railway system.
As for energy, several works were concluded, including the rehabilitation of Block One of the 260 Megawatt (MW) “Lidio Ramón Pérez” de Felton Thermal Power Plant (CTE) and the 100 MW Mariel Unit Six.
At the same time, as part of Cuba’s focus to move away from fossil fuels and toward renewables, 5 MWs have come online through solar farms built with a new investment at “Mayajigua” and 50 MWs from three solar farms at the Mariel Special Development Zone.
The Ciro Redondo electric plant in Ciego de Avila province, designed to generate 390 Gigawatt hours (GWh) and deliver 300 GWh to the national electricity system, is another of the investments concluded in 2020, related to the energy conversion program.
Oil and Gas
The completion of five wells for oil and gas drilling, the repair of 40 storage tanks capable of receiving 130,000 cubic meters of fuel and the rehabilitation of 40 Kms of gas pipelines are some of the projects completed in this sector. The five completed wells will allow for oil and gas extraction to continue at current levels.
As for the hydraulic system, sections of canals, tunnels and irrigation systems were completed. Four water pipelines were completed and 75,500 meters installed, benefiting 628,000 inhabitants.
During 2020, 47,400 housing units were built, 15,300 of which correspond to state planning. For 2021 projections show 44,643 homes to be completed, of which 15,872 will be under state planning, 12,831 will be subsidized and 15,940 will be self-sufficient.
For 2021, the investment plan has increased by 22% over the estimate for 2020. The investments included in this plan are distributed by province, with 12% allocated for local projects and 88% nationally.
Sixty percent of investment opportunities are concentrated in the priority sectors: Defense, Food Production, Tourism, Renewable Energy Sources, Housing, Cement and Steel Production Factories.
For further information on Cuban investments, download the Portfolio of Investment Opportunities book by following the link.