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PetroCaribe puts more “arrows in Belize’s quiver”

HighlightsPetroCaribe puts more “arrows in Belize’s quiver”

Belize has imported just over BZ$450 million worth of products under the PetroCaribe arrangement

H.E. Yoel Pérez Marcano, Venezuela’s Ambassador to Belize, cut the ribbon on Friday morning, declaring open the Belize City office of PetroCaribe in Belize, under a regional agreement which Venezuela has established with countries in the Caribbean to provide fuel oil products to their countries under long-term concessionary financing deals aimed at promoting development while reducing poverty.

Government officials said that with the opening of the Coney Drive office, the Belize-Venezuela joint venture company, ALBA Petrocaribe Belize Energy Limited (APBEL, in which Belize holds a 45% stake and Venezuela a 50% stake) now has offices (rented from Euan Gillett) from which to continue administering their logistics and finances under the energy partnership agreement.

“Today’s event reflects the Venezuelan revolution,” Marcano declared, in addressing a gathering of people who toasted to the opening with glasses of wine.

The Ambassador noted that the idea for PetroCaribe originated in 2005 in Puerto la Cruz, Venezuela, with Commandant Hugo Chavez, the former president of Venezuela who passed away last year, when he proposed to representatives of Caribbean governments the possibility of an agreement for energy cooperation which supports the economics of the region. Marcano said that Chavez’s idea is of major importance today for the development of Caribbean countries.

Juan Castañon, who serves as the PDV Caribe Focal Point for APBEL, said that the program is the outcome of “the great vision created by Chavez.”

Castañon said that the program will be established as a vehicle for aiding Belize’s development and he is sure that within a few years, they will look back and be proud of the accomplishments they will have made while building a Latin America and Caribbean region that is more equitable.

Prime Minister Dean Barrow said that Friday’s opening of the PetroCaribe office in Belize City is a kind of “brick and mortar testament” of the importance of PetroCaribe for BZ – the trailblazing nature of the program and its south-south paradigm.

Barrow said that the PetroCaribe program is part of a larger and more significant regional development program – a new model of economic cooperation arrangements in Latin American and Caribbean affairs under the aegis of Venezuela’s ALBA regime – the Bolivarian Alternative for the Americas.

He said that while Belize has not yet signed on to the ALBA regime, the country has benefited enormously.

“Venezuela is giving until it hurts and for that we just want to thank them…” said Belize’s Minister of Foreign Affairs, Wilfred “Sedi” Elrington, in his remarks at the opening.

Elrington said that he does not think there is another country that has gone as far as Venezuela in earmarking resources for development and poverty alleviation.

Barrow explained that when Belize receives fuel from Venezuela, it does so at market price – just over US$100 a barrel. He said that Venezuela can’t sell for less because it is constrained by OPEC (The Organization of the Petroleum Exporting Countries), of which the country is a member. The benefit comes to Belize because rather than being required to pay for the oil upfront, the country is only required to pay for 40% of the fuel within 30 to 90 days, and the remaining 60% is financed over 25 years at a nominal interest rate of 1% per annum.

Meanwhile, the funds paid to the Government by the importer, PUMA, goes into the consolidated revenue fund and Government has been using the funds to inject capital into the National Bank, and also to finance infrastructure projects. Barrow said that they have already committed $40 mil for the construction of the new Belize City Center.

Last year, with the death of Chavez, there were talks that the interest rate would be hiked on recipient countries, but Barrow told the press today that they have received a formal commitment from Venezuela that the existing rate will continue to stand – at least for the foreseeable future.

“As far as we know, the interest rate is not going to change. There have been that sort of rumor circulating but the official reassurances have come,” Barrow told us.

He hinted at the possibility of tapping into the funds to help settle contingent liabilities of the Government – such as compensation to the former shareholders of Belize Telemedia Limited and Belize Electricity Limited, as well as to buy back Belize’s super-bond, which carries a higher interest rate of about 7%, which he said would be another “arrow in the quiver.”

John Mencias, deputy chairman of APBEL, said that the launch of the office coincides with the 26th anniversary of the establishment of diplomatic relations between Belize and the South American republic.

Mencias said that Belize first initiated the partnership with Venezuela in 2006, and it restarted on September 8, 2012, after a hiatus spanning 2009 to 2012.

Since the resumption of the program, Belize has imported over $190 million (US dollars) worth of oil from Venezuela under the PetroCaribe agreement, a total of 1.4 million barrels of fuel and fuel products.

Information provided to us in a booklet distributed at the launch indicates that Belize has imported just over BZ$450 million worth of products under the PetroCaribe arrangement: US$46 million between 2005-2009, when fuel was primarily provided to the agro-industries, and a further US$180 million since 2012, with 100% of fuel products now coming via Venezuela.

“We are very proud of being part of this partnership between Belize and Venezuela and look forward to this continued friendship,” Mencias said.

“What we are doing here today shows us that PetroCaribe not only is stronger than ever but that we will keep and we will continue the agreement in order to benefit the people from Central America and the Caribbean,” said Ricardo Garcia, the official representative of PDV Caribe of the Bolivian Republic of Venezuela, who Mencias recognized for his tireless work in getting the Belize program established.

Also among those present were members of the board of directors of APBEL, who include Financial Secretary Joe Waight, Artemio Osorio, Yvette Alvarez — all of the Ministry of Finance, and BTL chairman Net Vasquez.

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