Loan granted to petrochemical company of Venezuela

(Caracas, March 6, 1992).- Next Monday 9th, CAF will sign a US$30 million loan agreement for construction and start up of a lineal polyethylene plant to be located in the Zulia Petrochemical Complex (El Tablazo) with a total cost of US$298 million.

The loan will be granted to the joint venture Resinas Lineales CA (RESELIN), developer of this project, formed by Pequiven (48%), Grupo Zulia (28.5%), CETIC of Canada (19.5%), and Latino Sociedad Financiera (4%).

The plant - which will begin production in 1994 - will have a production capacity of 150,000 tons a year of high and low density lineal polyethylene to supply domestic demand and export significant volumes.

This is the third loan that CAF has granted to the Venezuelan petrochemical industry, which has great potential for development because of its attraction for the private sector and foreign investors. In 1990 CAF granted the largest loan to the private sector in its history ($42 million) to the joint venture Productora de Alcoholes Hidratados CA (PRALCA) to partially finance construction of an ethylene oxide and ethylene glycol plant located in the industrial area of Santa Rita, Zulia state. CAF had previously contributed to financing construction of a polyol and ethoxylate production plant for ETOXYL.

The loan to RESILIN is granted as project finance, which does not require financial guarantees from the shareholders. The plant will use Sclairtech advanced technology under license from DuPont, Canada, which is very versatile.

The project will have a great impact on the production of plastic manufacturing industry, permitting the country to save substantial amounts of foreign currency through import substitution.

The agreement will be signed in CAF headquarters in Caracas at 11 am.