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Russia extends $1bn loan to Venezuela for defence purchases
By Guy Anderson
30 September 2008
Russia is understood to have agreed to provide Venezuela with a USD1 billion loan to fund the procurement of defence materiel: a move consistent with Moscow's forecast of an "explosion" in accords with Caracas and the "doubling or tripling" of orders over the coming three years.
Russian state information service RIA Novosti announced on 25 September that the loan would be advanced, citing Kremlin sources. The timing coincided with Venezuelan President Hugo Chávez's two-day visit to Moscow.
The July 2008 edition of Jane's Industry Quarterly - 'Eastern Promise: China, India and Russia in the global defence market' - reported that Venezuela had emerged as the second most significant customer for Russian defence materiel after Algeria in 2006, helped partly by the United States' decision in the same year to impose an arms embargo on Caracas.
The impact on Russian exports was significant: Latin America accounted for just 7.7 per cent of Russia's total foreign defence sales during 2006 (according to Moscow's Centre for Analysis of Strategies and Technologies), but Venezuela alone accounted for 16 per cent of all military exports in 2007. Defence and aerospace contracts valued at USD3 billion were signed by the two countries in June 2006 to coincide with a visit to Moscow by Chávez.