In the coming months China will lend Venezuela, which faces bankruptcy, ten billion dollars. These funds are part of a bilateral agreement. For China it’s a way to quench its energy needs, while the US continue the confrontation line with Venezuela.
Venezuela is under the threat of soverign default. In providing two five-billion dollar loans, China has become an important partner for the struggling country. The first part of the loan is the joint Chinese-Venezuelan Fund, and will be directed into major projects, CNBC reported. The agreement will be signed later this month. China extended the terms of the loan to five years, giving Venezuela more breathing room, as the terms are typically limited to three years.
The second part of the loan will be used in the oil industry. China will support investments in oil fields, intended to help Venezuelan oil company PDVSA increase production, the official said. 96 percent of Venezuela’s foreign exchange revenue comes from the export of raw materials.