Skip to content
AidData logo

Overview

[China-Venezuela Joint Fund] CDB provides $403 million loan for Alcasa Aluminum Plant Project (Linked to Record ID#58677, 37808 and #37804)

Commitment Year•2011Country 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, 2011

Geospatial footprint

Map overview

Visualizes the AidData-provided feature geometry for this project.

Loading map…

The Chinese Government helped construct the Alcasa aluminum plant. More detailed locational information can be found at https://www.openstreetmap.org/relation/12475238

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 Banks

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

State-owned companies

  • Aluminum Corporation of China (Chinalco)

State-owned Funds

  • China-Venezuela Joint Fund

Collateral providers

State-owned companies

  • Pétroleos de Venezuela S.A. (PDVSA)

Loan desecription

[China-Venezuela Joint Fund] CDB provides $403 million loan for Alcasa Aluminum Plant Project

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

In November 2011, Venezuela's Alcasa signed a deal with China Aluminum International Engineering Company (“Chalieco”) to improve the performance of Alcasa's primary aluminum smelters. The amount contracted for the project was 403 million USD, provided by the China-Venezuela Joint Fund. By October of 2011, it was reported that there were several difficulties with Chinalco's proposed improvements, and there was some doubt as to whether or not the project could continue. A release on Chinalco's website in June of 2014 admitted that the project was slow to be implemented, but at that date had been 78% completed. Alcasa produces 22.5 kilogram ingots (49.5 pounds), rolled aluminum in coils, plates and bands and other products for the construction, electrical, transport, packing and refrigeration industries. At the time of this deal Alcasa only had resources to operate at 40 percent of its installed capacity of 420,000 metric tons (462,971 tons) per year. In addition to the Chalieco funds, President Chávez approved $90.4 million to be provided by FONDEN to support CVG Alcasa’s operations. According to a Correo Del Orinoco source, the project is financed through the long-term facility of China Venezuela Joint Fund. The China-Venezuela Joint Fund receives contributions from China Development Bank and FONDEN, and it is administered by BANDES. See Record ID#58677 for more information on the fund.

Staff comments

1. According to a Correo Del Orinoco source, the project is financed through the long-term facility of China Venezuela Joint Fund. The China-Venezuela Joint Fund receives contributions from China Development Bank and FONDEN, and it is administered by BANDES. See Record ID#58677 for more information on the fund. 2. To avoid double-counting, the transaction (commitment amount) field is set to Missing.