Cuba’s biomass sector is on the rise – the Ciro Redondo biomass plant is finally under construction thanks to an injection of cash from China – but financing remains an issue for the renewable energy sector.
The Ciro Redondo plant is being developed by Havana Energy, led by President Andrew Macdonald. “The most challenging thing we have had to deal with in the last six years of developing this project has been the financing,” said Biopower President Andrew Macdonald, while touring the site of the Ciro Redondo plant.
The Scotsman, who has been doing business with Cuba for more than a decade, said the U.S. blockade had “strangled” funding from Europe “and other obvious sources”, with banks afraid of sanctions.
His start-up Havana Energy joined forces with a subsidiary of domestic sugar monopoly Azcuba to create Biopower in 2012, with a contract to build five plants attached to sugar mills.
The plants are projected to use sugar cane byproduct bagasse and fast-growing woody weed marabu as biofuels, costing around $800 million to add some 300 MW to the grid.
Biopower was finally able this year to start building the first one, thanks to a decision by China’s Shanghai Electric Group Ltd to buy an equity stake in Havana Energy. The JV is now looking for external financing for the next four plants.
“We have to check whether the funders are open for the Cuban market or not,” said Zhengyue Chen, former investment manager at Shanghai Electric and current Biopower chief financial officer.
