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Overview

[China-Venezuela Joint Fund] The Santa Lucia-Kempis Highway Expansion Project (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 (actual)
Aug 1, 2014

Geospatial footprint

Map overview

Visualizes the AidData-provided feature geometry for this project.

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The Santa Lucia-Kempis Highway Expansion Project. More detailed locational information can be found at: https://www.openstreetmap.org/way/598513098 and openstreetmap.org/way/598513102 and https://www.openstreetmap.org/way/598513101 and https://www.openstreetmap.org/way/598513097

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

Private Sector

  • Camargo Correa Group

State-owned companies

  • Sinohydro Corporation Limited

State-owned Funds

  • China-Venezuela Joint Fund

Collateral providers

State-owned companies

  • Pétroleos de Venezuela S.A. (PDVSA)

Loan description

[China-Venezuela Joint Fund] The Santa Lucia-Kempis Highway Expansion Project

Interest type•Unknown

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 Santa Lucia-Kempis Expressway project is the first EPC project under the multilateral cooperation framework of China, Brazil and Venezuela, with a contract value of $600 million. The funding of this project was allocated through the China-Venezuela Joint Fund. The project is carried out by the China Hydropower Corporation, which is based on the Engineering Bureau, as the responsible party (accounting for 80% of the contract share). The scope of the project includes the design, procurement, construction of the new 20-kilometer highway and the widening of the existing 4-kilometer highway. The project will be implemented in two phases with a total construction period of 24 months. The project was formally signed in January 2014, and the first board of directors of the joint venture was held in April to determine the basic operational framework. Construction started in August 2014. On the morning of December 10, 2014, the expansion section of the Venezuelan Sancan Expressway Project, which was led by the Eighth Bureau of Hydropower and Power Engineering, a subsidiary of POWERCHINA, was completed and opened to traffic.