Venezuela receives $5 billion from China to implement ‘development plans’

China has awarded Venezuela $5 billion dollars for unspecified “development plans,” President Nicolas Maduro said Sunday, approximately three months after an official visit to China -- .

According to published reports, the loan is part of a $10 billion deal to be completed in the following months. The second part of the deal will go to develop oil fields, a senior official at state oil company PDVSA told Reuters.

Venezuela has intensified its diplomatic and trade relations with China over the last nine years, supplying it oil to the tune of 640,000 barrels per day – amount set to increase to one million in the coming years.

In 2008, the two countries created a binational fund to finance projects. The Venezuelan government has received more than $40 billion through this fund, which Caracas has been paying off with oil.

According to Reuters, loans often are contingent on hiring Chinese construction, engineering or oil services companies.

Estimates by the China-Latin America Finance Database and quoted by the BBC website show that Chinese bank loans to Latin American countries rose by 71 percent ($22 billion) in 2014.

The database points out that in that period of time Chinese loans to the region accounted for more than the total of loans made by the World Bank and the Inter-American Development Bank in 2014.

Venezuela's oil industry accounts for the vast majority of the country's hard-currency earnings and about half of budget revenues.

The world's fifth-largest crude exporter, Venezuela sells around 2.5 million barrels of oil per day to foreign markets, approximately 870,000 of which are destined for the United States.

Until 1999, when leftist Hugo Chavez became president, practically all of Venezuela's oil exports went to the United States.

AP and EFE contributed to this report.

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