Brazil to Offer Financing to Cuba

[Jimmy2]

Brazil to Offer Financing to Cuba

By ANDREA RODRIGUEZ Associated Press Writer

HAVANA — Brazilian President Luiz Inacio Lula da Silva is expected to grant Cuba millions of dollars in food and infrastructure credits, while signing a deal to begin exploratory oil drilling in Cuban waters within two years.

It was not clear if Silva, who arrives for a two-day visit to Cuba on Monday, will meet with ailing, 81-year-old Fidel Castro, who has not appeared in public since emergency intestinal surgery forced him to cede power to his younger brother Raul in 2006.

The two countries plan to sign "substantial" economic agreements to boost trade, said Luis Marfil, first secretary of Brazil's embassy in Havana.

Brazil's foreign ministry said the accords would include $100 million in food financing for Cuba, while Brazilian state media said $70 million would go to modernize a Cuban nickel plant and unspecified amounts to improve roads, infrastructure and hotel projects on the island.

A separate deal would allow Petrobras, Brazil's state-run energy company, to explore for deep-water oil in Cuban parts of the Gulf of Mexico, Brazilian presidential spokesman Fabio Rocha said by phone from Havana. The company hopes to run wells there within two years, he said, declining to detail the terms of the deal.

Cuban Gulf territory, which authorities have divided into 59 blocks, could contain large quantities of crude, and Spanish, Canadian, Indian and Malaysian energy firms have already signed contracts to explore the area.

Petrobras would hope to sign deals with those companies, too, along with an agreement to build a lubricants factory in Cuba, Rocha said.

Not yet on Silva's agenda for a Monday night meeting with Raul Castro are plans to discuss ethanol.

Brazil is world's top producer of the biofuel, and Fidel Castro last spring railed against a deal Silva signed with the U.S. to promote ethanol production, warning that using crops for fuel would inflate food prices and starve the poor.

Even so, Cuba has quietly modernized its own ethanol facilities, and Castro has drawn a distinction between the cane ethanol produced in Brazil and Cuba, and the corn-based biofuel common in the U.S. _ though he criticizes both.