Russia considers $20 million loan to Cuba

Russian President Vladimir Putin (R) and Cuban leader Fidel Castro stand side by side by during Putin's official welcoming ceremony outside Havana's Palace of the Revolution, December 14, 2000. REUTERS/Jorge Silva

MOSCOW (Reuters) - Russia is considering loaning $20 million to Cold War ally Cuba, Prime Minister Vladimir Putin said on Monday, adding that the money would be spent on buying Russian goods.

Rising import costs, falling prices for key export nickel and three hurricanes meant that 2008 was one of the worst years in Cuba’s recent history. “We need to make a decision on giving Cuba a loan of $20 million... That money would be spent at our companies because the plan is for Cuba to use the funds for buying Russian-made goods,” Putin told a government meeting.

“In the current, non-simple economic situation, I think this will be for the good of Russia’s real economy sector.”

Despite spending billions of dollars to support the economy and cushion the slide in the ruble’s exchange rate, Russia still has the world’s third-largest gold and forex reserves, which were worth $426.5 billion on January 9.

Cuban President Raul Castro plans to visit Moscow, Russian President Dmitry Medvedev said last week, without specifying a time frame.

Moscow was Havana’s main benefactor during the Cold War and Medvedev’s visit to Cuba last year was seen as a sign that Russia seeks to rekindle the alliance abandoned after the 1991 collapse of the Soviet Union.

Russian oil firms want to drill offshore and its military has talked about airspace defense cooperation with Havana.

Reporting by Toni Vorobyova; Editing by Ron Askew