Cuba is open for business, but it’s complicated. Last week, New Energy Events hosted a webinar, Opening the Doors to Cuba’s Energy Revolution: An Introduction for Global Investors. The webinar featured four experts on the Cuban market who uncovered some of the complexity, sharing what it takes to become an investor in a market that has been off limits to much of the world for decades. Panelist experts included Chris Bennett, Managing Director of Caribbean Council; Lee Evans, Senior Policy Advisor with Engage Cuba; David Lenigas, CEO and Chairman of the Board for LGC, Ltd.; and Hermenegildo Altozano, Partner at Bird & Bird projects.
While the webinar and its content was aimed at a global audience, much of the focus lay squarely on the American investor and easing restrictions between Cuba and the US. Implicit in this discussion was the issue of finance; primarily its availability and whether the multilateral banks will be a part of the investment community in Cuba. Panelists agreed that foreign companies would have access to funds to finance projects in Cuba – energy projects being easier than other business categories – but the role of multilateral banks and US lenders is still in question. The US government has to lift certain restrictions to allow these finance institutions into Cuba.
David Lenigas – an investor with a growing stack of companies throughout Cuba – summed up his experience saying, “Cuba is great place, but difficult. It is run by the Cubans, for what the Cubans want”. And the Cubans clearly understand their needs for energy – turnkey projects are ready to go, and can be found in the portfolio of opportunities. The portfolio lays out a clear path for foreign investors and makes clear that Cuba not only has a keen understanding of its needs, but also grasps the importance of the foreign business community to make their vision a reality. The growing issues in Venezuela – a topic examined by Lee Evans – are only heightening the need for Cuba to seek investment in their economy from international companies.
Chris Bennett shared some of the ways Cuba is opening up its economy to foreign investors. “Foreign direct investment is a core priority for them, and foreign investors are now able to have majority shares in joint ventures. Most decisions are now pragmatic, where they were previously ideological.” Chris suggested that the slow pace of business is dictated by the government’s consensus driven approach.
When asked, ‘What should the priority be of someone looking to do business in Cuba? All panelists recommended that the first step in getting involved with Cuba is, simply, going there. Though, easier said than done. What do you need, then, when carving the path into Cuba? Lee Evans agreed that a visit to Cuba as a starting point makes sense but with caveat. “Developing a market entry strategy is key. Investors should find matching interests in the Cuban energy market, and need to be staying within the guidelines and rules and regulations.” As an American, Lee suggested the first step might actually be “a visit the Cuban embassy in DC.” David Lenigas urged investors to consider the length of time it could take just getting started, “The biggest issue for investors is that it takes time to get into Cuba – it can take up to 6 months just to get legal documents notarized. You’ll need to be a registered entity. You need a business visa just to meet with Cuban officials, and you need to be invited to meet with them.”
Hermenegildo Altozano is no stranger to Cuba’s business and energy markets – he has spent more than twenty years setting up joint ventures between Cuban and foreign entities. He suggested investors be aware of the three P’s when going into Cuba, “Presence, persistence, and patience. It’s important that you establish yourself in Cuba, and remember that all investments are authorized on a case by case basis, so it will take time.”
Clearly, there is a lot of opportunity in Cuba’s energy sector, but following the steps correctly is paramount to becoming a serious player in Cuba. Serious investors may want to consider joining a trade mission, such as those set up through the Caribbean Council’s “Cuba Initiative” or Eco Cuba Network. For investors keen to learn more, New Energy Events will host the first “Cuba Energy and Infrastructure Summit” jointly with IJ Global and the Cuban Center for Renewable Energy (CETER) on September 1-2 in Havana. Visit www.newenergyevents.com/cuba to apply to attend and to learn more.