Petrocaribe Faces an Uncertain Future After Chávez

Petrocaribe Faces an Uncertain Future After Chávez

It’s election season again in Venezuela. And while the future of the country’s international oil agreements will be far from most voters’ minds on April 14, the same cannot be said for the 17 Caribbean and Central American nations that make up Petrocaribe. Their energy security, if not economic stability, may well rest on the outcome of the presidential race.

Established with 14 members in 2005, Petrocaribe provides preferential payments for Venezuelan oil on extremely favorable terms. Currently, members pay a mere 5-50 percent of the market price upfront. The remainder is then repaid over a 17-25 year period at 1 percent interest.

Venezuela’s largesse under recently deceased President Hugo Chávez made the fuel-for-loans scheme not only popular but indispensible. Energy-starved Caribbean nations in particular have benefited as the global financial crisis has slashed tourism revenue in the region, leaving them with limited alternatives for meeting their energy needs.

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