Overview

[China Venezuela Joint Fund] China Funds USD 2.178 Billion India Urquia Power Plant (linked to Record ID#58677)

Commitment Year•2009Country of Activity•VenezuelaDirect Recipient Country of Incorporation•VenezuelaSector•EnergyFlow Type•Loan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date: May 1, 2009

Start (actual): Oct 1, 2009

End (planned): Dec 1, 2013

End (actual): Oct 1, 2016

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)

Cofinancing agencies

Government Agencies

Fondo Nacional para el Desarrollo Nacional (FONDEN)

State-owned companies

CORPOELEC

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

Duro Felguera

State-owned Funds

China-Venezuela Joint Fund

Collateral providers

State-owned companies

Pétroleos de Venezuela S.A. (PDVSA)

Loan desecription

China Venezuela Joint Fund Funds USD 2.178 Billion India Urquia Power Plant in 2009

Interest rate (t₀)•1.72%Interest type•Fixed Interest Rate

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 China-Venezuela Joint Fund sponsored the USD 2.178 billion India Urquia Power Plant (also known as TermoCentro or El Sitio). The contract was signed in May of 2009, so the plant was funded by either Tranche A (Record ID#35985) or Tranche B (Record ID#37528) of the China-Venezuela Joint Fund (see Record ID#58677). The project also received funds from FONDEN and Corpoelec. A 2013 budget report from the Ministry of People's Power for Planning put the total project cost at USD 1,744,374,460.56. A National Assembly commission from 2018 put the total project cost at USD 2.78 billion. The contractor was Duro Felguera of Spain. The contract was signed in May of 2009. Construction began in October of 2009. The first phase of construction involved the installation of four 150 MW Siemens turbines, for a total installed capacity of 560 MW. This phase was completed on September 18, 2013. The second phase involved installing two combined cycles in October of 2016, for a total of 1,080 MW. The project was somewhat delayed, as the original plan was for all construction to be completed by the end of 2013. The plant was active as of 2018. Venezuelan officials visited the plant in 2020, and it was still functioning. A representative from Duro Felguera appeared before the National Commission in 2016 to discuss the plant. A 2018 extradition decision on the case of Nervis Gerardo Villalobos Cárdenas mentioned that he was being charged in Venezuela for awarding the TermoCentro contract to Duro Felguera after receiving a EUR 46 million bribe. In 2018, Spain charged Duro Felguera and some of its executives with paying USD 105 million in bribes to secure the TermoCentro contract.

Staff comments

1. No transaction amount is provided because it is captured by Record ID#58677. 2. It appears that this plant is part of the broader TermoCentro complex. It's unclear what the names of the other plants are and if they were funded by the Joint Fund.