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Montevideo, May 20th 2019 - 04:42 UTC

China makes effective 5bn dollars loan to Venezuela for 'development plans'

Monday, April 20th 2015 - 23:59 UTC
Full article 34 comments
 Maduro made the announcement during a public ceremony, and said the funds would go to unspecified 'development plans' Maduro made the announcement during a public ceremony, and said the funds would go to unspecified 'development plans'
In 2014, Chinese loans to the Latam region accounted for more than the total of loans made by the World Bank and the Inter-American Development Bank In 2014, Chinese loans to the Latam region accounted for more than the total of loans made by the World Bank and the Inter-American Development Bank

China has awarded Venezuela 5 billion dollars for unspecified “development plans,” President Nicolas Maduro said on Sunday, approximately three months after an official visit to China. According to published reports, the loan is part of a 10 billion deal to be completed in the following months.

 The second part of the deal will go to develop oil fields, a senior official at state oil company PDVSA revealed.

Cash strapped Venezuela has intensified its diplomatic and trade relations with China over the last nine years, supplying it oil to the tune of 640,000 barrels per day – amount set to increase to one million in the coming years.

In 2008, the two countries created a bi-national fund to finance projects. The Venezuelan government has received more than 40 billion dollars through this fund, which Caracas has been paying off with oil.

As is the rule with Chinese agreements, the loans are contingent on hiring Chinese construction, engineering and/or oil services companies.

Estimates by the China-Latin America Finance Database and quoted by the BBC website show that Chinese bank loans to Latin American countries rose by 71%, or 22bn dollars in 2014.

The database points out that in that period of time Chinese loans to the region accounted for more than the total of loans made by the World Bank and the Inter-American Development Bank in 2014.

Venezuela's oil industry accounts for the vast majority of the country's hard-currency earnings and about half of budget revenues. The world's fifth-largest crude exporter, Venezuela sells around 2.5 million barrels of oil per day to foreign markets, approximately 870,000 of which are destined for the United States.

Until 1999, when populist leader Hugo Chavez became president, practically all of Venezuela's oil exports went to the United States.

Top Comments

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  • Skip

    Lifeline!

    Apr 21st, 2015 - 01:37 am 0
  • 313toBioBio

    Coming soon,a chinese financed great wall around the oil in venezuela and soy in argentina to keep this bullshi+ shared socialist future intact.

    Apr 21st, 2015 - 02:51 am 0
  • Troy Tempest

    China is being smart about this.

    They know Venzla is desperate and will agree to any terms.

    The U.S. is already getting oil from Venzla - why should they care to spend more money on an unstable erratic country, run by a man who receives instructions from a straw bird on his hat???

    Apr 21st, 2015 - 06:58 am 0
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