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Overview

[China-Venezuela Joint Fund] Purchase of Equipment for Bauxilum [Linked to Record ID#58677]

Commitment Year•2012Country of Activity•VenezuelaDirect Recipient Country of Incorporation•VenezuelaSector•Industry, Mining, ConstructionFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2012

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

Government Agencies

  • Government of Venezuela

State-owned Banks

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

State-owned companies

  • C.V.G. Bauxilum C.A. (Bauxilum)

State-owned Funds

  • China-Venezuela Joint Fund

Implementing agencies

State-owned companies

  • Corporacion Venezolana de Guayana (CVG)

State-owned Funds

  • China-Venezuela Joint Fund

Collateral providers

State-owned companies

  • Pétroleos de Venezuela S.A. (PDVSA)

Loan desecription

[China-Venezuela Joint Fund] Purchase of Equipment for Bauxilum

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 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

In 2012, Venezuelan state alumina and bauxite company Bauxilum invested US$15mn to purchase equipment that will help normalize operations, improve bauxite management and extend the lifespan of stacking equipment. Some 50% of the resources to carry out the project were provided by the China-Venezuela fund. The status of these investments is unclear. The China-Venezuela Fund was signed in 2007 as $4 billion, making it the largest loan China has given to a signal is partly financed by China Development Bank but we don't know exactly how much is funded by CDB. There are three portions to the fund: tranche A, B, and C. As of 2016, the tranche B loan was renewed by US$5 billion. The China-Venezuela Joint Fund receives contributions from China Development Bank and FONDEN, and it is administered by BANDES. See Record ID#58677 for more information on the fund. In 2015, China renewed this same portion from US$ 4 billion to US$5 billion. The payable date was extended from 2 years, to 5 years. Tranche C underwent similar changed to aid Venezuela in paying off US$ 1 billion. The total investment is $215.8 million, being financed by the CDB and Exim Bank.

Staff comments

Funded by #58677, the China Venezuela Joint Fund. Bauxilum also received large sums from the China Venezuela fund in 2009 and 2014.