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Overview

[China-Venezuela Joint Fund] Continuation of the Gran Mariscal de Ayacucho Highway in Venezuela (Linked to Record ID#58677)

Commitment Year•2014Country of Activity•VenezuelaDirect Recipient Country of Incorporation•VenezuelaSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2014
Start (planned)
Jan 1, 2013
Start (actual)
Jan 1, 2014
End (actual)
Jan 1, 2015

Geospatial footprint

Map overview

Visualizes the AidData-provided feature geometry for this project.

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The China-Venezuela Joint Fund financed the continuation of the Gran Mariscal de Ayacucho Highway. More detailed locational information can be found at https://www.openstreetmap.org/relation/12988905

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

Government Agencies

  • Venezuela Ministry of Transportation and Communications

State-owned Funds

  • China-Venezuela Joint Fund

Collateral providers

State-owned companies

  • Pétroleos de Venezuela S.A. (PDVSA)

Loan desecription

[China-Venezuela Joint Fund] Continuation of the Gran Mariscal de Ayacucho Highway in Venezuela

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 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 China-Venezuela Joint Fund financed the continuation of the Gran Mariscal de Ayacucho Highway. Construction began in 2014, and the Venezuelan government committed to the project in 2013 in the Plan de Movilidad para la Región Metropolitana de Caracas. China Development Bank (CDB) and FONDEN or the National Development Fund (administered through Bandes) manage this fund. It is unclear which tranche funds this project. The cost is unknown, but in the Ministry of Transportation and Public Works source, the president of CorpoMiranda, Elias Jaua Milano, says that the project anticipates an investment of 4 million bolivars, product of the financing from the China-Venezuela joint fund. The plan specifically calls for the construction of the Los Velasquez-El Guapo stretch in Miranda State and the construction of the Unare-Piritu segment in Anzoategui State. 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. The first commitment to this fund was made in 2007.

Staff comments

The flow type is unclear, however, the Chinese part of the fund is financed by a loan, so the same is assumed here. The transaction amounts for all sub-projects are accounted for in the projects for the three tranches and their renewals. Because it is unclear how much funding for each project is from the Chinese side and it is unclear which tranche is funding each sub-project, the transaction amounts should not be recorded until this information is known.