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Overview

[China-Venezuela Joint Fund] China funds nine Socialist Agricultural Development Schemes (Linked to Record ID#58677, 37804, 37808, 91524,91536, 91538, 91539, 91553, 91565, 91569, 91615, 91618)

Commitment Year•2010Country of Activity•VenezuelaDirect Recipient Country of Incorporation•VenezuelaSector•Agriculture, Forestry, FishingFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2010
End (planned)
Dec 31, 2012

Geospatial footprint

Map overview

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China helped fund nine socialist projects of agricultural development in the Guarico, Apure, Delta Amacuro, Barinas and Portuguesa regions. More detailed locational information can be found at: Guarico: https://www.openstreetmap.org/relation/272663 Apure: https://www.openstreetmap.org/relation/3395162 Delta Amacuro: https://www.openstreetmap.org/relation/272669 Barinas: https://www.openstreetmap.org/relation/3763132 Portuguesa: https://www.openstreetmap.org/relation/272661

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 ownershipAt least 25% Chinese ownership

Funding agencies

State-owned Policy Banks

  • China Development Bank (CDB)

Receiving agencies

State-owned Banks

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

State-owned Funds

  • China-Venezuela Joint Fund

Implementing agencies

State-owned Funds

  • China-Venezuela Joint Fund

Collateral providers

State-owned companies

  • Pétroleos de Venezuela S.A. (PDVSA)

Loan desecription

[China-Venezuela Joint Fund] China funds nine Socialist Agricultural Development Schemes

Interest type•Unknown

Collateral

The borrowing was collateralized with PDVSA income from daily oil sales (in quantities not less than 230,000 barrels per day) 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 contract) 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. The borrower was required to maintain a minimum cash balance in the collection (escrow) account equivalent to no less than 1.3 times the aggregate amount of principal, interest, and any other amount due during the next repayment period. If the minimum cash balance was not maintained, then PDVSA would be responsible for increasing the amount of fuel and/or crude oil to be delivered under the petroleum sales and purchase contract to ensure that (a) the actual debt service coverage ratio was maintained at the required level at the required times; and (b) the amount in the New Collection Account was sufficient to meet the required balance requirements set out in the facility agreement. If PDVSA did not do so, then BANDES was responsible for transferring funds to the CDB-controlled bank account to 'remedy any shortfall.' The lender also had the ability to block the debtor from withdrawing the funds.

Narrative

Full Description

Project narrative

The Venezuelan Government will promote nine socialist projects of agricultural development in the Guarico, Apure, Delta Amacuro, Barinas and Portuguesa regions, all aimed at strengthening agricultural plant and livestock production in the country. Many, although not all, of these projects were financed by the Long Term Facility of the China-Venezuela Joint Fund (see Record ID#37804 and #37808). The Río Tiznado Socialist Agrarian Development Project Phase II (see Record ID#91539) had a commitment date of 2008, which means it most likely was not funded by the Long Term Facility. The Delta Amacuro Agriculture Development Project (see Record ID#91553) and the Santo Domingo Irrigation Project (see Record ID#91565) were most likely not funded by the Long Term Facility either, as both were committed before the fund was announced. The total cost of all of the projects is USD 682 million, although no project amount could be found for Record ID#91538. All these projects were implemented by the Ministry of Popular Power for Agriculture and Lands. Río Guárico Socialist Agriculture Project (#91524) Píritu Becerra Socialist Agriculture Project (#91536) Eje Biruaca-Achaguas Socialist Agriculture Project (#91538) Río Tiznado Socialist Agrarian Development Project Phase II (#91539) Delta Amacuro Agriculture Development Project (#91553) Santo Domingo Irrigation Project (#91565) Llano Alto Socialist Agroecological Development Project (#91569) Guanarito Agriculture Project (#91615) Alto Apure Socialist Axis Project (#91618)

Staff comments

1. These projects were all announced in "Ejecutivo impulsa 9 grandes proyectos de desarrollo agrario socialista con apoyo chino" together, despite not necessarily being funded from the same facility. 2. This project is linked to Record ID#58677, 37804, 37808, 91524,91536, 91538, 91539, 91553, 91565, 91569, 91615, and 91618.