Venezuela has received $5 billion of new financing from China, as President Nicolas Maduro battles Latin America’s deepest recession and record shortages of basic goods.
“With the alliance with China, we just received $5 billion of financing for development,” Maduro said on state TV Sunday. “We are working on other tranches, I will be informing you when they arrive.”
The collapse of oil revenue has sent Venezuelan foreign reserves to about $20 billion, near a decade low. The benchmark dollar bond due in 2027 fell to 45.6 cents on the dollar Friday on concern the country won’t be able to service its debt.
Before today’s announcement, Venezuela had about $20 billion of outstanding loans from China, its biggest funder, according to consultant Eurasia Group. New funds are likely to be tied to specific projects where Chinese companies control disbursement, rather than cash that Venezuela needs to import scarce goods ranging from meat to car parts and to pay bondholders, according to Eurasia.