Project ID: 39118

Chinese Government provides $10 billion loan for balance of payments support

Commitment amount

$ 11222755695.789524

Adjusted commitment amount

$ 11222755696.04

Constant 2021 USD

Summary

Funding agency [Type]

China Development Bank (CDB) [State-owned Policy Bank]

Recipient

Venezuela

Sector

General budget support (Code: 510)

Flow type

Loan

Level of public liability

Central government debt

Infrastructure

No

Category

Intent

Mixed (The next section lists the possible statuses.)

Commercial

Development

Representational

Mixed

Financial Flow Classification

OOF-like (The next section lists the possible statuses.)

Official Development Assistance

Other Official Flows

Vague (Official Finance)

Flows categorized based on OECD-DAC guidelines

Project lifecycle

Status

Implementation (The next section lists the possible statuses.)

Pledge

Commitment

Implementation

Completion

Suspended

Cancelled

Milestones

Commitment

2015-03-01

Description

According to a filing with the U.S. Securities and Exchange Commission, the Chinese Government provided a $10 billion loan to the Government of Venezuela for balance of payments support in March 2015. Under the terms of the agreement, the Government of Venezuela was authorized to repay the loan via deliveries of oil and fuel by PDVSA. In September 2015, the Economist Intelligence Unit reported that ‘Venezuela's external accounts […] have come under growing pressure in recent months on the back of lower oil prices. The Banco Central de Venezuela (the Central Bank) has not published any balance-of-payments data in 2015, so an accurate assessment of the external position is difficult, but a significant fall in international reserves indicates that the current-account surplus has been sharply eroded (potentially even registering a deficit) and that net capital outflows have continued.’ Then, in May 2016, the Chinese Government and the Government of Venezuela reportedly agreed to new commercial conditions for their oil-for-loans program that improved the terms for the Government of Venezuela.

Additional details

1. The China-Latin America Finance Database, which is co-produced by the Inter-American Dialogue and Boston University’s Global Development Policy Center, does not capture this $10 billion loan. 2. The oil-for-loans program between the Chinese Government and the Government of Venezuela involves the provision of debt that is collateralized against PDVSA income from daily oil sales to China National United Oil Corporation (ChinaOil). 3. The funding agency (lender) is not disclosed by any of the underlying sources. However, given that China Development Bank is the principal supplier of oil-backed loans to Venezuela, it is most likely the funding agency. This issue merits further investigation.

Number of official sources

3

Number of total sources

6

Download the dataset

Details

Cofinanced

No

Direct receiving agencies [Type]

Government of Venezuela [Government Agency]

Collateral provider [Type]

Pétroleos de Venezuela S.A. (PDVSA) [State-owned Company]

Collateral

PDVSA income from daily oil sales to China National United Oil Corporation (ChinaOil)

Loan Details

Bilateral loan

Foreign currency swap or Balance of payments loan

Rescue loan