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Overview

[China-Venezuela Joint Fund] Support to Aluminum, Iron, and Steel Companies [Linked to Record ID#58677]

Commitment Year•2009Country of Activity•VenezuelaDirect Recipient Country of Incorporation•VenezuelaSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2009

Stakeholders

Organizations involved in projects and activities supported by financial and in-kind transfers from Chinese government and state-owned entities

Ultimate beneficial owners

At least 25% host country ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

Government Agencies

  • Government of Venezuela

Implementing agencies

State-owned Banks

  • Banco de Desarrollo Económico y Social de Venezuela (BANDES)

Collateral providers

State-owned companies

  • Siderúrgica de Orinoco C.A. Alfredo Maneiro [SIDOR]

Loan description

[China-Venezuela Joint Fund] Support to Aluminum, Iron, and Steel Companies

Interest type•Unknown

Collateral

The borrowing was collateralized with PDVSA income from daily oil sales to China National United Oil Corporation (ChinaOil), which was deposited in a collection (escrow) account at China Development Bank (CDB). Banco de Desarrollo Económico y Social de Venezuela (BANDES) opened and maintained a USD-denominated collection (escrow) account with CDB into which all proceeds from oil export sales -- under an offtake agreement (petroleum sales and purchase agreement) between PDVSA and ChinaOil -- were deposited for the purposes of (a) making regular debt service payments to CDB, and (b) maintaining a minimum cash collateral balance.

Narrative

Full Description

Project narrative

President Hugo Chavez of Venezuela conceded $300.2 million to assist Venezuela's ailing aluminun, iron, and steel companies, drawing from the China-Venezuela Joint Financing Fund (Fondo Estrategico Pesado, see #37330 and #35985). Three disbursements were made for $4,400,000, $45,400,000, $250,400,000 for a total of $302,000,000. Five state-owned alumninum companies and Sidor, a company nationalized in 2007, received assistance. It is unclear how the funds were specifically used to assist the companies. May be linked to Record IDs #38305 and #38306 Because this project was supported, at least in part, by the China-Venezuela Joint Fund/Fondo Estrategico Pesado (See #35985, #37528, #37838, #38163, 38316, and #38380), this project is marked as a resource-backed or commodity-backed loan.