Venezuela received $5 billion in funding from China as part of the long-standing Joint Chinese-Venezuelan Fund, said Finance Minister Rodolfo Marco on Twitter. After last year's drop in oil prices, the Opec nation is suffering widespread shortages of basic goods and foreign reserves are down 20 percent from a year ago. "Today we received the resources that correspond to the second renewal of Tranche B of the Joint China-Venezuela Fund," the minister said on Twitter.
He added that the "renewal" of the $5 billion was a sign of "confidence between governments" and that the money would be used to "promote and diversify our economy." China is Venezuela's primary financier and has lent the South American nation more than $46 billion to be repaid in oil, after accords signed with late president Hugo Chavez in 2007. Some of that money has been used to shore up international reserves, currently under $17 billion. The country obtains 96 percent of its foreign income from oil.
Venezuela and China in early July changed the terms of a funding agreement to be repaid in oil, establishing a three-year amortization for a tranche that previously did not have a final due date. The agreement allows Venezuela to borrow in tranches of up to $5 billion and repay with oil shipments. Venezuela is also negotiating another loan of $5 billion for state oil company PDVSA.
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