Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 022/2018

SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES CONCESSIONAL EXTRAORDINARY CREDIT IN FAVOR OF THE NATIONAL ELECTRIC COMPANY FOR Bs88,706,072.- PROJECT “WARNEs WIND PARK CONSTRUCTION”.

VISTOS:

• The Political Constitution of the State promulgated on February 7, 2009.
• Law No. 1670 of the Central Bank of Bolivia (BCB) of October 31, 1995.
• Law No. 614 of the General State Budget - Management 2015 (GBE-2015) of December 13, 2014.
• Law No. 769 of the General State Budget – Management 2016 (GBE-2016) of December 17, 2015.
• Law No. 856 of the General State Budget – Management 2017 (GBE-2017) of November 28, 2016.
• Law No. 928 of April 27, 2017, creating the National Public Strategic Company of Bolivian Lithium Deposits.
• Supreme Decree No. 3058 of January 22, 2017.
• Supreme Decree No. 3070 of February 1, 2017.
• Ministerial Resolution No. 578 of June 20, 2017, from the Ministry of Economy and Public Finances (MEFP).
• Ministerial Resolution No. 234-17 of December 4, 2017, from the Ministry of Energy (MEN).
• BCB Board Resolution No. 019/2016 of February 2, 2016, which approves the Regulations for the Approval of Credits to National Public Strategic Companies (EPNE) within the framework of the General State Budget Laws.
• Board Resolution No. 38/2016 of November 28, 2016.
• Note CITE: ENDE-DGFN-8/27-17, dated August 9, 2017, from the National Electric Company (ENDE).
• Notes CITE: ENDE-DGFN-8/21-17, ENDE-DGFN-8/22-17 and ENDE-DGFN-8/20-17,

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all dated August 4, 2017, from ENDE.

• Note CITE: ENDE-DGFN-12/18-17, dated December 8, 2017, from ENDE.
• Note CITE: BCB-GOM-SOSP-DCE-CE-2017-219 of December 19, 2017, from the BCB.
• Note CITE: ENDE-DGFN-2/4-18 dated February 6, 2018, from ENDE.
• Report BCB-GOM-SOSP-DCE-INF-2017-257 of December 15, 2017, from the Monetary Operations Management (GOM).
• Report BCB-GAL-SANO-DLBCI-INF-2017-428 of December 15, 2017, from the Legal Affairs Management (GAL).

CONSIDERING:

That the Political Constitution of the State (CPE), promulgated on February 7, 2009, in item 6 of its article 9, establishes that it is the aim and function of the State to promote and guarantee the responsible and planned use of natural resources, and to boost their industrialization, through development and strengthening of the productive base in its different dimensions and levels.

That the aforementioned Constitution, in paragraph I item 10 of article 158 and article 322, establishes that the Plurinational Legislative Assembly has the attribute to approve the contracting of public debt when the capacity to generate income to cover capital and interest is demonstrated, and the most advantageous conditions in rates, terms, amounts, and other circumstances are technically justified. Public debt will not include obligations that have not been expressly authorized and guaranteed by the Plurinational Legislative Assembly.

That Law No. 1670, in its article 44, determines that the highest authority of the BCB is its Board of Directors, responsible for defining its policies and specialized regulations of general application and internal norms, as well as establishing administrative, operational, and financial strategies. To this effect, according to items a) and q) of its article 54, the Board is empowered to adopt general decisions that are necessary for the BCB to fulfill its functions, competencies, and powers recognized by legal mandate, as well as to assume the necessary attributes for the fulfillment of its functions.

That the aforementioned Law in its article 57 and item e) of its article 59, provides that it corresponds to the President of the BCB as the first executive authority of the institution, to exercise the legal representation of the Issuing Entity.

That Law No. 614 of the GBE-2015, in its article 12, provides that any authorization

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established by Law of the General State Budget, for the BCB to grant extraordinary credits, as well as the authorizations to the MEFP, to issue and grant Non-Negotiable Treasury Bonds through the General Treasury of the Nation as backing for the referred extraordinary credits, will not require any other legal authorization for their fulfillment, understanding that they remain in force until the complete execution of the credit.

That Law No. 769 of the GBE-2016, in its article 9, authorizes the BCB to grant an extraordinary credit of up to Bs12,270,161,994.- (Twelve Billion Two Hundred Seventy Million One Hundred Sixty-One Thousand Nine Hundred Ninety-Four 00/100 Bolivianos) in favor of ENDE, under concessional conditions, with the object of financing investment projects for generation and transmission in the energy sector, or generation projects that will be executed by its subsidiary or affiliate companies through capital contributions or by ENDE parent company, or by ENDE parent company associated with its affiliate and subsidiary companies. For this effect, the BCB is exempted from the application of articles 22 and 23 of Law No. 1670 of October 31, 1995. Likewise, it provides that according to what is established by article 158, paragraph I, item 10 and article 322 of the CPE, ENDE is authorized to contract the referred credit with the BCB.

That in paragraph III of the cited article, the MEFP is authorized through the TGN to issue and grant Non-Negotiable Treasury Bonds in favor of the BCB, to guarantee the amount of the credit granted, upon written request of the lead sector Ministry and jointly with the BCB.

That according to paragraph IV of the mentioned article, the Ministry of Hydrocarbons and Energy (MHE) is responsible for the evaluation and monitoring of the execution of the resources of the credit to be granted by the BCB in favor of ENDE.

That according to paragraph V, ENDE is responsible for the use and destination of the resources to be disbursed by the BCB within the framework of paragraph I of the mentioned article.

That according to paragraph VI of the same article, the MHE, currently MEN, by ministerial resolution must justify before the BCB, that the use and destination of the resources of the credit to be acquired by ENDE, are of national priority within the framework of the Economic and Social Development Plan, and that future flows will be used for the payment of the credit.

That Law No. 856 of the GBE-2017, in its third final provision, establishes that article 12 of Law No. 614 of the GBE-2015, among others, remains in force for its application.

That Law No. 928, creating the National Public Strategic Company of Bolivian Lithium Deposits, in paragraph II of its single additional provision, determines that the MEN by Ministerial Resolution must justify before the BCB that the use and destination of the credits to be contracted by ENDE are of national priority

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according to the Economic and Social Development Plan within the Framework of Integral Development for Living Well and that future flows will be used for the payment of said credits.

That Supreme Decree No. 3058, in its article 1, establishes the modification of Supreme Decree No. 29894 of February 7, 2009, on the Organization of the Executive Branch to create the MEN. Likewise, in its articles 4, 5, and 6, it determines the attributes of that State Portfolio and the Vice Ministries that form part of its structure.

That Supreme Decree No. 3070 modifies Supreme Decree No. 29894, complements Supreme Decree No. 3058, establishing in its first additional provision that for the purposes of the application of Supreme Decree No. 3058, the terms “energy” and/or “energy-related” will comprise the sectors of electrical energy, lithium, and nuclear energy, as appropriate, and in its third additional provision it provides that the functions, attributes, and competencies of the former MHE will be assumed by the Ministry of Hydrocarbons (MH) and the MEN, in the hydrocarbons and electrical energy sectors, as appropriate.

That Ministerial Resolution No. 578 establishes for Public Companies that exceptionally access internal credits to be granted by the BCB, applicants for internal public debt, a Concessionality Degree of at least 20% from the date of publication of this Ministerial Resolution.

That Ministerial Resolution MEN No. 234-17 of the MEN, justifies before the BCB and resolves among other things: 1) Determine that according to Law No. 769 of December 17, 2015, of the Public Sector Budget for Fiscal Management 2016, the Project “Warnes Wind Park Construction” will be executed by ENDE, will be partially financed with a credit of $us12,745,125.29 (Twelve Million Seven Hundred Forty-Five Thousand One Hundred Twenty-Five 29/100 American Dollars), equivalent to Bs88,706,072.00 (Eighty-Eight Million Seven Hundred Six Thousand Seventy-Two 00/100 Bolivianos), to be requested from the BCB, amount that will be destined to the Project; 2) Approve the technical feasibility of the Project, according to what is stated in the Technical Report ENDE-IT-UEPI-6/15-17 of June 12, 2017 and the Technical Report MEN 17/11210 – VMEEA/DGEA No. 75 of November 14, 2017; 3) Approve the economic-financial evaluation of the project contained in the financial report ENDE-IF-UMEN-6/1-17 of June 12, 2017, based on what was manifested by the Financial Report MEN 17/11489/DGAA/UFIN No. 099/2017 of November 30, 2017; since it has been manifested that ENDE has the payment capacity for the credit to be contracted with the BCB and establishes that the use and destination of the resources of the credit to be contracted by ENDE, are of national priority within the framework of the “Patriotic Agenda for the Bicentennial 2025” elevated to the rank of Law by Law No. 650 of January 19, 2015, and of the Economic and Social Development Plan 2016 – 2020 approved by Law No. 786 of March 9, 2016; and that the flows indicated in the preceding Paragraph will be used for the payment of the credit to be granted by the BCB in favor of ENDE and 4) It is established that the MEN will authorize ENDE’s disbursement requests to the BCB, based on an evaluation and monitoring report that must be issued for each disbursement,

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the MEN through the Vice Ministry of Electricity and Alternative Energies – VMEEA will carry out the evaluation and monitoring of the physical and financial execution of the project, ENDE is obliged to send all information and documentation that is required by the MEN, through the VMEEA, for the corresponding evaluation and monitoring.

That the BCB Regulations for the Approval of Credits to EPNE in the framework of the General State Budget Laws, approved by BCB Board Resolution No. 019/2016, aims to regulate the granting of credits by the BCB in favor of EPNE.

That by Board Resolution No. 38/2016, the Board of Directors of ENDE approves the Investment Plan and the Disbursement Schedule of the resources of the credit to be granted by the BCB, for the execution of the Project “Warnes Wind Park Construction”.

CONSIDERING:

That by note CITE: ENDE-DGFN-8/27-17, ENDE requests from the BCB a concessional extraordinary credit for Bs88,706,072.00 (Eighty-Eight Million Seven Hundred Six Thousand Seventy-Two 00/100 Bolivianos), to finance the Project “Warnes Wind Park Construction”, for this effect, it attaches the documentation established in the Regulations for the Approval of Credits to EPNE in the framework of the General State Budget Laws.

That by notes CITE: ENDE-DGFN-8/21-17, ENDE-DGFN-8/22-17 and ENDE-DGFN-8/20-17, ENDE informs the Ministry of Development Planning, MEFP and MEN, respectively, of a copy of the Board Resolution of ENDE No. 38/2016.

That by note CITE: ENDE-DGFN-12/18-17, ENDE sends complementary information to the credit request for the Project “Warnes Wind Park Construction” with the object of giving continuity to the credit request.

That by note CITE: BCB-GOM-SOSP-DCE-CE-2017-219, the BCB communicates to ENDE the conditions approved by the Board and requests its acceptance.

That by note CITE: ENDE-DGFN-2/4-18, ENDE communicates that its Board accepts the conditions of the concessional credit approved by the Board of the BCB.

That the GOM in its Report BCB-GOM-SOSP-DCE-INF-2017-257, considers the interest rate scenarios proposed for the approval of the financial conditions of the credit requested by ENDE and in case the request is considered favorably, ENDE must open the corresponding disbursement and payment accounts at the BCB through the MEFP.

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That the GAL concludes in its Report BCB-GAL-SANO-DLBCI-INF-2017-428, that the request made by ENDE falls within what is provided for by the current regulations, therefore it is established that ENDE has complied with the presentation of the documentation provided for in article 2 of the BCB Regulations for the Approval of Credits to EPNE in the Framework of the General State Budget Laws, corresponding to the Board of Directors of the BCB the consideration of the referred credit request, by two-thirds of the votes of the members present in the meeting as provided in article 8 of the cited Regulations.

That article 8 of the BCB Regulations for the Approval of Credits to EPNE in the Framework of the General State Budget Laws, establishes that upon receipt of the EPNE’s conformity on the financial considerations, the Board of Directors of the BCB will approve the granting of the credit by Resolution, with the favorable vote of two-thirds of its members present at the respective meeting. Likewise, it will authorize the President of the BCB to sign the respective contract.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve within the framework of what is provided in Law No. 769 of the General State Budget – Management 2016 (GBE – 2016) and Law No. 856 of the General State Budget – Management 2017 (GBE – 2017), of the antecedents and provisions described above, the granting of a concessional extraordinary credit in favor of ENDE, to finance the Project “Warnes Wind Park Construction”, under the following terms and conditions:

Concept	Detail
Currency:	Bolivianos.
Total Credit Amount:	Bs88,706,072.00 (Eighty-Eight Million Seven Hundred Six Thousand Seventy-Two 00/100 Bolivianos).
Term:	30 years from the first disbursement.
Grace Period on Principal:	5 years.
Interest Rate:	1.31% (one point three one percent).
Disbursement Deadline:	October 31, 2020.
Payment Plan:	Annual.
Guarantees:	Non-Negotiable Treasury Bonds.

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Article 2.- Authorize the President of the BCB to sign the contract with ENDE under the terms of this Resolution.

Article 3.- The Presidency and the General Management are in charge of the execution and compliance of this Resolution.

La Paz, February 6, 2018

Pablo Ramos Sánchez
Abraham Pérez Alandia
Gabriel Herbas Camacho
Luis Baudoin Olea
Ronald Polo Rivero
Sergio Velarde Vera