Overview

[China-Venezuela Joint Fund] Venezuela Mission Alma Mater Project [Linked to Record ID#58677)

Commitment Year•2010Country of Activity•VenezuelaDirect Recipient Country of Incorporation•VenezuelaSector•EducationFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date: Jan 1, 2010

Start (actual): Jan 1, 2010

Geospatial footprint

Map overview

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The China-Venezuela Joint Fund supported the Mission Alma Mater project to improve higher educational facilities across Venezuela including in Maracaibo, Cabimas, Caracas (Catia and Petare), Barquisimeto, Mérida, Maracay, San Cristóbal, Los Teques, Guarenas, Valencia and Barcelona. Maracaibo: https://www.openstreetmap.org/relation/3447446 Cabimas: https://www.openstreetmap.org/relation/3447561 Catia: https://www.openstreetmap.org/relation/13291735 Petare: https://www.openstreetmap.org/relation/6174125 Barquisimeto: https://www.openstreetmap.org/relation/3919035 Mérida: https://www.openstreetmap.org/relation/272635 Maracay: https://www.openstreetmap.org/relation/2689580 San Cristóbal: https://www.openstreetmap.org/relation/3324584 Los Teques: https://www.openstreetmap.org/relation/2458066 Guarenas: https://www.openstreetmap.org/relation/2453242 Valencia: https://www.openstreetmap.org/relation/10833239 Barcelona: https://www.openstreetmap.org/relation/14451189

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 Funds

China-Venezuela Joint Fund

Collateral providers

State-owned companies

Pétroleos de Venezuela S.A. (PDVSA)

Loan desecription

[China-Venezuela Joint Fund] Venezuela Mission Alma Mater Project [Linked to Record ID#58677)

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

In 2007, the China-Venezuela Joint Fund supported the Mission Alma Mater, a Venezuelan initiative to enhance higher education. According to Chavez's announcement at the launching of the initiative, there will be 11 new national universities, in addition to 13 regional ones and 4 new technical institutions. In addition, 29 existing technological institutes and schools will be converted to technical universities. According to AVN, 10 new universities would be created for this Mission. The specific beneficiaries of the funding from the Joint Fund are unclear. In 2008, it was announced that in two years there will be 25 new institutions, of which 10 will be specialized, 12 will be built in the states and 3 will be university institutes of technology. Of those that will be transformed, 17 university institutes will be polytechnic universities and 8 industrial technical schools will become university technological institutes. There will be 12 state universities, these will be built in Maracaibo, Cabimas, Caracas (Catia and Petare), Barquisimeto, Mérida, Maracay, San Cristóbal, Los Teques, Guarenas, Valencia and Barcelona. The 3 university institutes will be in Nueva Esparta, Maturín and the Valles del Tuy. In addition to creating new institutions, 200 buses were delivered to different universities.. 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, and the Medium source says that the Mission Alma Mater project was executed in 2010.

Staff comments

The flow type is unclear. The CDB contributions to the Fund were a loan, so it is possibly a loan here. The Mission Alma Mater project began in 2007, but it is unclear when the Joint Fund started financial support: multiple sources say the project began to be executed in 2010, which is why it is coded as the commitment year. As it accounts for multiple education projects, this project may be an umbrella. 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.