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Overview

[China-Venezuela Joint Fund] CDB provides loan for TermoCarabobo I (El Palito) Power Plant (Linked to Record ID#58677, #91283, #37833, and #37808)

Commitment Year2010Country of ActivityVenezuelaDirect Recipient Country of IncorporationVenezuelaSectorEnergyFlow TypeLoan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2010
End (planned)
Aug 1, 2012
End (actual)
Sep 20, 2012
First repayment
Jul 2, 2010
Last repayment
Dec 30, 2019

Geospatial footprint

Map overview

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CDB provides loan for TermoCarabobo I (El Palito) Power Plant. More detailed locational information can be found at https://www.openstreetmap.org/way/157032682

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 companies

  • China CAMC Engineering Co., Ltd. (CAMCE)
  • Pétroleos de Venezuela S.A. (PDVSA)
  • Sinohydro Corporation Limited

State-owned Funds

  • China-Venezuela Joint Fund

Collateral providers

State-owned companies

  • Pétroleos de Venezuela S.A. (PDVSA)

Loan desecription

[China-Venezuela Joint Fund] CDB provides loan for TermoCarabobo I (El Palito) Power Plant

Grace period0.5 yearsGrant element10.2226%Interest rate (t₀)7.0687%Interest typeFixed Interest RateMaturity10 years

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 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 TermoCarabobo I power plant was one of the projects funded by the 2010 disbursement of $5.5 billion from the China-Venezuela Joint Fund long-term facility (see Record ID#37808). According to the National Assembly the project cost $1.116 billion in 2012 dollars. The plant was opened in September of 2012. The project was developed by PDVSA, Corpoelec, Sinohydro, and CAMCE. PDVSA was involved because the plant is located at the El Palito refinery. The plant has a capacity of 772 MW. A 2018 National Assembly report recorded an overcharge of 156%, or $872 million. Sinohydro did not appear before the commission on the electricity crisis. A lawsuit in Andorra alleged that at least 12 Venezuelan officials had taken bribes worth $1 million in exchange for giving the TermoCarabobo plant contract to Sinohydro and CAMCE. A second, similarly named power plant called TermoCarabobo II is captured via Record ID#91283.

Staff comments

1. It is important for researchers to note that this is not the same as TermoCarabobo II (see Record ID#91283 for TermoCarabobo II). They were both funded by the China-Venezuela Joint Fund and were built around the same time, but they are not the same project. The easiest way to differentiate them is that TermoCarabobo is 772 MW, and TermoCarabobo II has an output between 510 and 680 MW. Some sources incorrectly describe TermoCarabobo II as the 772 MW facility, but that is wrong. Source "Data 1" makes this error, but it was used as a source because it accurately reflects that there are two power plants named TermoCarabobo in Venezuela. 2. This project is linked to Record ID#37833, which captures power plants pledged in 2010 from the China-Venezuela joint fund. #58677 is the China-Venezuela joint fund. 3. This plant is located at El Palito refinery, and is sometimes referred to as "El Palito" but it is not the same thing as the refinery. 4. No transaction amount is included for this project because it is captured in the China-Venezuela Joint Fund.