Active Mixed AidData Chinese Aid

CDB provides $5 billion loan for oil field development projects in September 2015 (Linked to Record ID#39099)

$5M USD

Funder	China Development Bank (CDB)
Recipient Organization	Government of Venezuela
Country	Venezuela
Start Date	Sep 01, 2015
End Date	Apr 06, 2029
Duration	4,966 days
Number of Grantees	1
Roles	Recipient
Data Source	AidData Chinese Aid
Grant ID	`41089`

Grant Description

CDB provides $5 billion loan for oil field development projects in September 2015 On April 20, 2015, Venezuelan President Nicolas Maduro announced that the Government of Venezuela had received $5 billion in financing from China. This was the first disbursement of a $10 billion, USD-denominated, oil-backed loan from China Development Bank.

CDB specified that half of the $10 billion loan was required to be spent on several oil field development projects in the Orinoco Oil Belt.

The first $5 billion disbursement, a renewal of Tranche B of the Joint Chinese-Venezuelan Fund (Fondo Estrategico Pesado de Financiamiento), carried a 5-year maturity (instead of the usual 3-year maturity).

The loan agreement was signed in March 2015, and the first disbursement was deposited in a bank account that was accessible to the borrower in April 2015.

At the time, it was reported that a second, "special" $5 billion loan disbursement would likely stipulate hiring Chinese companies to boost production in PDVSA's mature oil fields.

That 10-year loan was originally expected to be signed in June 2015 and contracted by BANDES (Venezuela’s state-owned development bank). However, according to a filing with the U.S.

Securities and Exchange Commission, it was not until September 2015 that the Chinese Government (almost certainly via CDB) provided the Government of Venezuela with another $5 billion loan disbursement (with a 10-year maturity) to finance oil projects and increase Venezuelan oil production within a few months.

Under the terms of the loan agreement, the Government of Venezuela was allowed repay the loan via deliveries of oil and fuel by PDVSA.

The first, $5 billion loan disbursement is captured via Record ID#39099 and the second, $5 billion loan disbursement is captured via Record ID#41089.

📋 Staff Comments

The China-Latin America Finance Database, which is co-produced by the Inter-American Dialogue and Boston University’s Global Development Policy Center, captures the first, $5 billion loan disbursement in April 2015. It does not captured the second, $5 billion loan disbursement in September 2015.
The oil-for-loans program between the Chinese Government and the Government of Venezuela involves the provision of debt that is collateralized against PDVSA income from daily oil sales to China National United Oil Corporation (ChinaOil).
This project is a sub-project of the China-Venezuela Joint Fund (Fondo Estrategico Pesado de Financiamiento), which consists of Tranche A, B, C, and the Long Term Facility (see Project ID#58677). FONDEN is responsible for Venezuela's contribution to the Fund, and BANDES manages the Fund. Tranche B (captured via Project ID#37528) was renewed twice: in 2012 for $4 billion (captured via Project ID#38163) and in 2015 for $5 billion (captured via Project ID#39099).

📚 Sources & References

Venezuela 'receives $5bn in finance from China'
El Banco de Desarrollo de China, en apuros por préstamos a Venezuela
Venezuela recibe 5.000 millones de dólares por préstamo de China
Venezuela pide ayuda a China: 10.000 millones para amortiguar la caída de ingresos
Venezuela awaits second USD 5 billion loan from China
UPDATE 3-China to lend Venezuela $10 bln in coming months -source
Venezuelan Signs $5 Billion China Loan for Lifting Oil Output
Venezuela Says China to Give $5 Billion Oil Loan
Form 18-K Annual Report of the Bolivarian Republic of Venezuela
Venezuela y China concretan catorce acuerdos en áreas estratégicas
China aprobó préstamo a Venezuela de $5 mil millones para incremento de producción petrolera
China presta 5.000 millones de dólares a Venezuela
China signs off on $5 billion loan to boost Venezuela oil output: Maduro
Exhibit D to the Bolivarian Republic of Venezuela's Annual Report on Form 18-K
China-Venezuela Economic Relations: Hedging Venezuelan Bets with Chinese Characteristics
China's malign secrecy Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.

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Government of Venezuela

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