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Overview

[China-Venezuela Joint Fund] China Funds USD 135 Million Termozulia IV Power Plant (linked to Record ID#91431, 58677)

Commitment Year2009Country of ActivityVenezuelaDirect Recipient Country of IncorporationVenezuelaSectorEnergyFlow TypeLoan

Status

Project lifecycle

Completion

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Jan 1, 2009
End (actual)
Sep 2, 2010

Geospatial footprint

Map overview

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The Chinese Government provided USD 135 million for the construction of the Termozulia II power plant located in Maracaibo, Zulia, Venezuela. More detailed locational information can be found at: https://www.openstreetmap.org/way/1080604699

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

Government Agencies

  • Government of Venezuela

State-owned Banks

  • Banco de Desarrollo Económico y Social de Venezuela (BANDES)

State-owned Funds

  • China-Venezuela Joint Fund

Implementing agencies

Private Sector

  • Energy Parts Solutions
  • Energy Solutions C.A.
  • ProEnergy Services

State-owned Banks

  • Banco de Desarrollo Económico y Social de Venezuela (BANDES)

Collateral providers

State-owned companies

  • Pétroleos de Venezuela S.A. (PDVSA)

Loan desecription

[China-Venezuela Joint Fund] China Funds USD 135 Million Termozulia IV Power Plant

Interest rate (t₀)1.72%Interest typeFixed 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 agreement) 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.

Narrative

Full Description

Project narrative

In 2009, the China-Venezuela Joint Fund (see Record ID#58677) provided USD 135 million for the construction of the Termozulia II power plant. It was funded by either Tranche A (see Record ID#35985) or Tranche B (see Record ID#37528) of the Joint Fund. The primary contractors were Energy Parts Solutions, Proenergy Services, and Energy Solutions C.A. The EPC contract with Energy Solutions was signed on November 9, 2009. The natural gas-fueled plant was inaugurated on September 2, 2010, and it began operating with a capacity of 150 MW. The plant is part of the broader General Rafael Urdaneta Thermoelectric Complex, which houses Termozulia plants I-IV. See Record ID#91431 for TermoZulia II. TermoZulia V, a similarly named plant, is located approximately 122 kilometers from the General Rafael Urdaneta Thermoelectric Complex and is captured in Record ID#91486. A former Vice Minister of Electric Energy, Nervis Villalobos Cárdenas, has been accused of corruption relating to the construction of this plant. He was also accused of taking bribes during the tender process for the India Urquia (El Sitio) power plant (see Record ID#91468). Additionally, a 2018 the National Assembly report found a difference of 68% between the actual cost and the contract price.

Staff comments

1. This project is linked to Record ID#58677, which captures the China-Venezuela Joint Fund. It is also linked to the other China-funded project in the General Rafael Urdaneta Thermoelectric Complex, Termozulia II (see Record ID#91431). The funding for Termozulia I is unclear, and Termozulia III was funded by the Development Bank of Latin America (CAF). Termozulia V (see Record ID#91486) is not part of the General Rafael Urdaneta Thermoelectric Complex. 2. No transaction amount is listed because the amount is captured by one of the subprojects to Record ID#58677.