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Project Finance in Cuba: Can it be done?

In August 2016 Groupe ADP, a French airport operator, in consortium with Bouygues Bâtiment International, a French construction company, obtained the concession for the expansion and administration of the “Jose Marti International Airport” in Havana, Cuba (Havana Airport).1 This comes at a crucial time for air transportation and tourist development in the Caribbean Island. The recent normalization of relations between the U.S. and Cuban governments has produced a boom in the Cuban tourism industry.2

Havana Airport is the hub for the Cuban airlines “Cubana de Aviacion”, “Aerogaviota” and “AeroCaribbean”, and it also handles flights for more than 25 international airlines.3 The Airport has four passenger terminals and one freight terminal.4 The Cuban Transport Ministry said Bouygues was selected because of its track record in the construction sector in Cuba, and Groupe ADP due to its experience operating major airports in France and elsewhere.5 The project is set to provide the Havana Airport with a handling capacity of over 10 million passengers per year from 2020, double of what it can services currently.6

Little is known about how this project will be financed. But because of the nature of this endeavor it is extremely likely that project financing will be used to carry it out in a private public partnership (PPP) between the Operator ADP and the Cuban Government. A PPP is “a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance.”7 These are most used when governments lack the full financial resources and expertise to develop a certain project and look to the private sector for assistance.8 Projects using the PPP model are typically large endeavors that bring capital to the market and create local job opportunities.9

To get this project of the ground, Groupe ADP will have to prove it is a sound enough investment for lenders to go out on a limb and finance it through project finance terms.10 The success of this arrangement will be influenced by the state of current financial markets, the country where it is located, and the creditworthiness of the different participants.11

One of the main obstacles to find a lender are the Embargo related sanctions imposed on international banks that deal with Cuba.12 Cuba’s rock bottom credit rating of Caa2 is another big hurdle.13 But the most determining impediment would be if the U.S. President Donald Trump rolls back Obama’s diplomatic normalization of relations with Cuba.14

Concerning the sanctions, after President Obama announced the restoration of diplomatic ties between the U.S. and Cuba in 2014, soon afterwards embargo related financial restrictions were repealed. In regards to Cuba’s credit rating, Moody’s has changed Cuba’s Caa2 foreign currency issuer rating from stable to positive.15 This could be a positive influence with potential lenders. On the other hand current President Donald Trump has switched views several times on his policy towards Cuba.16 While he was campaigning for the presidency in South Florida, Trump promised to roll back all the normalization measures although he was publicly for them at the beginning of the race.17

At the moment we can only wait and speculate. If events keep developing in favor of Cuban and U.S. relations, Groupe ADP should be able to find lenders to finance the Havana Airport Expansion.18 But if the normalization process is reversed, international banks could face sanctions for conducting business with Cuba and the tourist boom that promoted the expansion of the Havana Airport in the first place will surely debilitate.19

  1. Press Release, Groupe ADP, Groupe ADP Enters into Exclusive Talks with the Cuban Authorities Concerning the Development of Havana International Airport (Aug. 5, 2015). 

  2. Erin Green, The State of Cuba’s Infrastructure, ENGINEERING.COM, (Feb. 25, 2016), 

  3. HAVANA AIRPORT, (last visited, Nov. 29, 2016). 

  4. Id. 

  5. Nelson Acosta, Cuba Chooses French Firms to Expand Airport as Tourism Booms, REUTERS (Aug. 3, 2016), 

  6. Id. 

  7. What Are Public Private Partnerships?, WORLD BANK (Oct. 3, 2015), 

  8. Vincent J. Napoleon, Growing potential for P3 infrastructure development in Cuba, NIXON PEABODY (Jan. 28, 2015), for_P3_infrastructure_development_in_Cuba. 

  9. Id. 


  11. Id. 

  12. Projects in Cuba Face Uphill Struggle for Funding, CUBA STANDARD (Oct. 19, 2016), 

  13. Moody’s Changes Cuba’s Outlook to Positive From Stable; Caa2 Rating Affirmed, MOODY’S (Dec. 10, 2015),–PR_339779. 

  14. Julia Sagebien, All Bets Are Off: Cuba Policy in the Trump Era, CUBA STANDARD (Nov. 15th, 2016), 

  15. MOODY’S, supra note 13. 

  16. Sagebien, supra note 14. 

  17. Id. 

  18. Id. 

  19. Id. 

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Pablo Remirez de Eztenoz

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