Overview

[China-Venezuela Joint Fund] Metro de Valencia in Venezuela (Linked to Record ID#58677)

Commitment Year•2007Country of Activity•VenezuelaDirect Recipient Country of Incorporation•VenezuelaSector•Transport And StorageFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date: Jan 1, 2007

Start (actual): Nov 18, 2006

Geospatial footprint

Map overview

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The China-Venezuela Joint Fund financed the Metro de Valencia and the continuation of its construction. More detailed locational information can be found at https://www.openstreetmap.org/relation/7680781#map=13/10.1773/-68.0025 and https://transportwiki.com/es/metro-de-valencia-venezuela/

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] Metro de Valencia 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 Metro de Valencia and the continuation of its construction. However, the exact financial commitment date is unknown. The complete Metro includes 4 lines with a total of 25 kilometers and 31 stations. The Venezuela Ministry of Transport and Public Works is responsible for implementation. Line 1 was inaugurated on November 18, 2006 and it began to operate commercially on November 18, 2007. Line 2 also has several stations in service. In April 2019, a delegation from the China Development Bank met with the board of the Metro de Valencia to verify the use of the resources contributed by the CDB and to evaluate the potential for new financing agreements. The train fleet consists of twelve Siemens SD-460 2-car light rail vehicle train sets. The metro has an average daily ridership of 62,000 passengers. 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

1. 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.