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Petrocaribe Makes Millionaire Social Investments in the Region

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The Venezuelan government is not thinking about discontinuing energy and social aid

 

An energy alternative will be difficult in the Caribbean insofar as Petrocaribe involves a strong social investment in addition to economic benefits. In fact, the structure of the agreement has enabled the parties to enhance their exports and save money, according to experts.
 
Breaking with dependence on Venezuela’s subsidies and cheap loans or replacing fuel oil and diesel with natural gas or photovoltaic stations for energy generation will take at least one decade. Therefore, Petrocaribe looks economically essential, experts elaborated.
 

From 2005 –the launching of Petrocaribe by Venezuela- to 2014, 301 million barrels of crude oil and byproducts departed from Venezuelan ports. Coverage accounts for 40% of the Caribbean energy demand.

 

In nine-year term, USD 3.9 billion was devoted to 432 welfare programs among the 18 countries which are parties to Petrocaribe, according to former Venezuelan Minister of Foreign Affairs, Rafael Ramírez. Add to this the incorporation of 14 joint ventures, paving the way to their own infrastructure relying on Venezuelan oil.

 

The Caribbean Energy Security Initiative sponsored by the United States focuses on “technical cooperation” instead of financial aid, where development banks and private corporations will invest in generation of renewable energy sources in the region.

 

The main challenge faced by the Caribbean countries in their attempt at developing new energy sources involves lawmaking to set the rules of the game and attract investments. Such is the US focal point.

 

Petrocaribe agreement includes some mechanisms to offset the oil bill, where Venezuela receives commodities as payment. Nevertheless, the bill is still very high.

 

If Venezuela would apply to Caribbean nations the same payment scheme used with the Dominican Republic, amounting to a 52% discount, it could lose up to USD 10 billion.  To date, the countries which are parties to Petrocaribe owe Venezuela USD 20 billion, as compared to a lump sum of USD 12 billion, except for Cuba, estimated by Barclays Capital.

 
 
 
Translated by Conchita Delgado Rivas
 

Source: www.english.eluniversal.com



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