China approves US$5.7bn in loans to Venezuela

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Tuesday, July 22, 2014

China approved US$5.69bn in loans to Venezuela as part of 38 bilateral agreements.

The financing includes a US$4bn injection into the countries' binational fund and a US$1bn loan from China's Exim bank to Venezuelan national oil company PDVSA, a Venezuelan government release said.

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The loan to PDVSA will go toward project development and the purchasing of goods and services.

China will also finance electric power generation, transmission and distribution projects in Venezuela, as well as minerals exploration and the development of the Sifontes Sur gold and copper project.

The countries have invested US$56bn in bilateral agreements over the last six years, the statement said.

Venezuelan state news agency AVN quoted Chinese President XI Jinping as saying that Venezuela increased its oil exports to China 25 times from 2001 to 2013.

"The financing from China does not put a heavy debt burden on Venezuela because it's backed by an oil production and supply formula that totals 524,000b/d," said Venezuelan President Nicolás Maduro.

Venezuela has said it plans to increase that amount to 1Mb/day by 2016.

China is now the second-largest importer of Venezuelan crude, according to the statement.

The 38 agreements also include projects related to housing, insurance, the economy, science, technology and aerospace.