China banks financing Mexican oil refinery

Chinese banks are providing $600 million in financing for the construction of an oil refinery at the Mexican port of Dos Bocas in the southeastern state of Tabasco, China’s ambassador to Mexico said on Monday.

Ambassador Zhu Qingqiao told reporters that Industrial and Commercial Bank of China (ICBC) and Bank of China were participating in financing for the refinery, one of President Andres Manuel Lopez Obrador’s flagship infrastructure projects.

It was unclear what kind of financing the banks would provide for the project, which the government says will be built for $8 billion. The price tag has been questioned as overly optimistic by critics of the project. Energy Minister Rocio Nahle later said the refinery, which would be Mexico’s biggest with a crude-processing capacity of 340,000 barrels per day, is being built with public money.

“The entire project, up until today, has been financed with federal (government) funds,” Nahle said in an interview with local radio, apparently contradicting the ambassador.

She said she was unsure if another company, or subcontractor, involved in the complex project might have received a loan from a Chinese entity.