Sunday, September 19, 2010

British firms could be first foreigners to buy land in Cuba since revolution

British firms could be first foreigners to buy land in Cuba since revolution

UK firms start talks with Cuban government about buying land for tourism
and energy projects
Elena Moya
The Observer, Sunday 19 September 2010

Maria La Gorda, Cuba British firms are talking to the Cuban government
about buying land for tourism and energy projects. Above, the beach at
Maria La Gorda. Photograph: Jamie Marshall/Getty Images

British companies could be among the first foreigners to buy land in
Cuba since Fidel Castro's revolution in 1959, following a delegation to
the communist state next weekend.

Up to 25 British companies are aiming to strike deals that could allow
them to develop hotels, golf courses and renewable energy projects.

Law firm Eversheds, Esencia Hotels and Havana Energy are among the firms
that will meet Cuban government officials, who are trying to attract
foreign capital to boost the country's shrinking economy.

"Cuba is open and prepared to receive foreign capital and to develop
mixed projects along with the Cuban government," said Igor Caballero, a
Cuban embassy spokesman in London.

The present government, led by Raúl Castro, has promised economic
reforms and last month approved a law allowing foreign investors 99-year
land leases. Cuba already has commercial relationships with Russia and
China, although their distance makes tourism and other trade deals

The British trip, organised by the independent Cuba Initiative, takes
place between 26 September and 3 October and may lead to the first
purchase of Cuban land by a foreign investor since 1959.

"We are optimistic of a positive outcome to the visit in terms of UK
investment. There are significant opportunities in a limited number of
sectors," said David Jessop, director of Cuba Initiative. The
organisation is co-chaired by Cuba's foreign trade minister Rodrigo
Malmierca Díaz.

Some projects, such as Esencia Hotels' luxury resorts, could be worth up
to $400m (£256m). The government could be prepared to sell 10 golf
course sites, and other projects include a $40m development using a
sugar-cane by-product to produce renewable energy, to be sold to the
Cuban grid.

More than 170,000 Britons visit Cuba every year, a number beaten only by
Canada, but Spanish companies such as the Sol Meliá hotel chain have
bigger investments there.

Investing in Cuba is a challenge, because of the US embargo on the
island, which limits banks' ability to lend funds directed to Cuban
projects. Cuba, which still has miles of virgin coast, does not have the
resources to develop its own tourism infrastructure. The country's
economy is worth $60bn and its total electricity capacity is only
slightly more than that produced by Britain's Drax power station alone.

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