CARACAS, July 21 (Reuters) - China will provide Venezuela with a $4 billion credit line under an agreement signed on Monday, with the money to be repaid by oil shipments from OPEC member Venezuela.
The deal was inked during a 24-hour visit to Venezuela by Chinese President Xi Jinping, who is on a tour of Latin America.
The money will go into the Joint Chinese-Venezuela Fund, which focuses on infrastructure and economic development in the South American country.
President Nicolas Maduro said the Venezuelan government would also put $1 billion into the fund.
The government said on Sunday the fund has about $40 billion in it, though it was not clear if that included the amounts covered by Monday’s agreement.
Officials said the credit would be repaid by shipments of about 100,000 barrels per day of crude and products.
No other terms were given.
Under the leadership of late socialist leader Hugo Chavez, Venezuela vastly expanded its use of loan-for-oil agreements with China, which helped ease stretched state finances while also improving the cash flow of state oil company PDVSA.
Chavez’s successor, Nicolas Maduro, who won election last year after Chavez died from cancer, has continued that policy.
A statement from PDVSA said Venezuela is now sending about 524,000 bpd to China, a figure expected to rise to 1 million bpd by 2016.
Bilateral trade between Venezuela and China has soared to $19.2 billion annually, compared with just $183 million in 1998, the year Chavez came to power, officials said.
Chinese entities participate in transport, housing, education, electricity, communication and vehicle-assembly projects in Venezuela. (Reporting by Andrew Cawthorne, Eyanir Chinea and Deisy Buitrago; Editing by Peter Galloway)