ons to develop 11 of the 25 plants.
Is financing the biggest hurdle? Havana Energy took years to get funded for Ciro Redondo.
Yes. Financing is tough, partly because of the U.S. Helms-Burton law that can affect investors in Cuban sugar mills and other state properties formerly owned by U.S. citizens or Cubans who became U.S. citizens. Ciro Redondo falls under that law, but Havana Energy was willing to take the risk.
Project finance also depends on the reputation, experience, and credit history of the companies investing. Havana Energy was new to these projects, so it needed time. Plus, it had an additional setback: General Electric bought the energy business of Alstom, the French company set to supply Ciro Redondo. [Because of the U.S. embargo on Cuba] we had to re-evaluate that project with a new [non-U.S.] supplier. Shanghai Electric stepped in, and they’re now helping finance the Ciro Redondo plant.
At Azcuba, we’re trying to negotiate as much as we can with companies with a proven record in biomass and the ability to raise funding.
In some nations, biomass plants falter, because private utilities offer very low prices to buy their electricity. But in Cuba, where the state controls both sugar and electricity, it seems you could avoid those conflicts of interest. How does the pricing work to buy electricity from the mills?
The government’s interest is to buy the electricity at a price that ensures benefits both for the investor and the country. The price of a power purchase agreement is negotiated for each project. The foreign investor gets paid in the currency in which they invested, be that euros, dollars or others.
Our system has the advantage that state companies and the government all row in the same direction, so it’s a win-win, especially for the Cuban people. Our electric company shares the same goal to get 24 percent of Cuba’s electricity from renewable sources by 2030 and to reduce oil and gas imports. We all want to be as energy independent as possible and stem the environmental impact of fossil fuels.