JBIC Signs Untied Loan Agreement with Petróleos de Venezuela, S.A. in Venezuela
1.Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Yasuda) signed an untied loan agreement totaling 69 billion yen (equivalent to US$ 500 million) with the de Venezuela, S.A. (PDVSA). The signing took place in Caracas City, Venezuela on September 4, 2000 in the honored presence of Venezuelan President Hugo Chavez. The loan is co-financed with The Bank of Tokyo-Mitsubishi, Ltd., The Sumitomo Bank, Ltd., The Fuji Bank, Ltd., The Sanwa Bank, Ltd., Nippon Life Insurance Co., The Yasuda Fire and Marine Insurance Co., Ltd., The Zenshinren Bank, and The Nomura Trust and Banking Company Ltd. JBIC will assume 48.3 billion yen, or 70% of the total amount.
2. The proceeds of the loan will be used to modernize the Puerto La Cruz Oil Refinery located along the coast of the Caribbean Sea, 320 kilometers east of Caracas, by introducing production facilities for higher valued products such as upgraded gasoline, unleaded gasoline, and low-sulfur light oil. These products will be sold in the domestic markets of Latin America. The Government of Venezuela as part of their environmental policy aims to convert all of their gasoline to unleaded and gradually reduce sulfur content of light oil. This is a top priority project for Venezuela if they hope to meet their nation's environmental regulation standards.
3.Endowed with abundant natural resources, Venezuela boasts the world's fifth largest crude oil reserves and the world's sixth largest natural gas reserves. This loan will strengthen cooperative ties with PDVSA, Venezuela's national oil corporation, as well as contributing to building closer economic ties between Venezuela and Japan.
4. The Project will help Japanese firms to expand exports of equipment for cotton spinning. It will also support the government of Uzbekistan in its efforts to boost the production of value-added products in the textile sector, by upgrading the aged cotton mill facilities to increase capacity. Further, the Project is expected to increase exports to neighboring countries, thus obtaining more foreign currency for Uzbekistan.