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Overview

[China-Venezuela Joint Fund] China Funds USD 204 Million Píritu Becerra Socialist Agriculture Project (linked to Record ID#37829, 37804, 37808, 58677)

Commitment Year•2010Country of Activity•VenezuelaDirect Recipient Country of Incorporation•VenezuelaSector•Agriculture, Forestry, FishingFlow Type•Loan

Status

Project lifecycle

Implementation

Pipeline: PledgePipeline: CommitmentImplementationCompletion

Timeline

Key dates

Commitment date
Oct 3, 2010
Start (actual)
Nov 1, 2010

Geospatial footprint

Map overview

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The Chinese Government provided funding for agricultural projects in Píritu Becerra, Venezuela. More detailed locational information can be found at: https://www.openstreetmap.org/relation/10961994

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

Government Agencies

  • Venezuela Instituto Nacional de Desarrollo Rural (INDER)
  • Venezuela Ministry of People's Power for Agriculture and Land

State-owned companies

  • China CAMC Engineering Co., Ltd. (CAMCE)

State-owned Funds

  • China-Venezuela Joint Fund

Collateral providers

State-owned companies

  • Pétroleos de Venezuela S.A. (PDVSA)

Loan desecription

[China-Venezuela Joint Fund] China Funds USD 204 Million Píritu Becerra Socialist Agriculture Project

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

On October 3, 2010, President Chavez announced a number of socialist agriculture projects to be implemented by INDER and the Ministry of People's Power for Agriculture and Land. One of those project was the Píritu Becerra Socialist Agriculture Project, which cost USD 204 million. The project is called "Proyecto Integral de Desarrollo Agrario Socialista Píritu Becerra" in Spanish and "皮里度贝塞拉综合农业项目" in Chinese. The main outside contractor was CAMCE. In October of 2010, CAMCE signed five contracts with INDER and the Venezuela Agricultural Company for the provision of goods and services on various socialist agricultural projects. For this project, CAMCE built rural roads, irrigation and drainage canals, and motor-pumped deep wells. It also provided agriculture and engineering equipment. According to Chavez, the project included the drilling of 100 wells, the rehabilitation of 100km of roads, and the development of 22,600 hectares of land for growing rice, soybeans, legumes, and vegetables. On January 29, 2012, Chavez gave a speech which addressed this project. He stated that in 2011, 1,000 hectares of land had been planted to yield 3,800 tons of seed rice. These seeds would the be planted on 32,000 hectares in 2012.

Staff comments

1. This project is linked to Record ID#37829, 37804, 37808, and 58677. 2. No transaction amount is included because the cost is captured by the China-Venezuela Long-Term Facility. 3. It is unclear if this project was ever finished.