Moscow approved a draft agreement late Tuesday for a 1.2 billion euro loan to Cuba to finance renovation and development of two of Cuba's thermal power plants.
According to Russian news agency Tass, the agreement involves financing the renovation of Cuba's Maximo Gomez and East Havana thermal power plants.
Russian Inter Rao Export company and Cuban Union Electrica company signed a MoU for the construction of four power units in two of the plants during Putin's visit to Havana on July 11, 2014.
"The Russian side will extend a state export credit to the Cuban side of up to €1.2 bln to finance construction of one 200 megawatt power unit at the Maximo Gomez thermal power plant and three power units each with a capacity of 200 megawatts at East Havana thermal power plant," the agreement stated.
The loan will be given on the provision that it will be repaid over tens years at an annual interest rate of 4.5 percent.
Cuba has more than 50 power plants but the biggest energy output comes from the Maximo Gomez thermal power plant.
Cuba is a net oil importer as most of its imports come from Venezuela, which sells crude to Cuba in a heavily subsidized rate, according to the U.S.' Energy Information Administration, EIA.
The country produced some 49,000 barrels per day of petroleum and consumed 171,000 barrels of oil a day in 2014, according to EIA's statistics.
As of Jan. 2015, Cuba had 124 million barrels of proven crude oil reserves, while many international oil and natural gas companies; Venezuela's PDVSA, Brazil's Petrobras, Spain's Repsol and Malaysia's Petronas tried to engage in exploration activities in the country, the EIA says.
Russian oil giant Rosneft and the China National Petroleum Company, CNPC, signed agreements in 2014 with Cuba to explore and produce heavy crude oil, according to the EIA.
Cuba aims to increase the share of renewable energy in its energy mix and is working to increase renewables six-fold to 24 percent by 2030 by constructing 13 wind energy farms.
By Murat Temizer