Board Resolution No. 039/2014

BOARD RESOLUTION NO. 039/2014

SUBJECT: MONETARY OPERATIONS MANAGEMENT — APPROVES CONCESSIONAL EXTRAORDINARY CREDIT TO THE BOLIVIAN COMPANY OF HYDROCARBON INDUSTRIALIZATION (EBIH) FOR AN AMOUNT OF Bs101,200,000.-

HAVING SEEN:

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. 455 on the General State Budget — Management 2014 (PGE-2014) of December 11, 2013.
Supreme Decree (D.S.) No. 0368 of November 25, 2009.
Supreme Decree (D.S.) No. 0384 of December 16, 2009.
Ministerial Resolution of the Ministry of Public Economy and Finance (MEFP) No. 023 of January 7, 2014.
Ministerial Resolutions of the Ministry of Hydrocarbons and Energy (MHE) No. 048 and No. 079 — March 14 and April 16, 2014.
Board Resolution of the BCB No. 023/11 of February 22, 2011, which approves the Regulation for the granting of credit to National Strategic Public Enterprises within the framework of the General State Budget — Management 2010 and 2011; modified through Board Resolutions No. 026/11, No. 027/11, No. 030/11, No. 097/11, No. 039/12, No. 064/12, No. 024/13, and No. 008/14 on dates March 2, March 18, March 22, and August 9, 2011, March 23, May 29, 2012, March 12, 2013, and January 28, 2014, respectively. Board Resolution of the BCB No. 144/13 of October 15, 2013. Board Resolution of EBIH No. 001/2014 of February 7, 2014. Notes from EBIH REF: EBIH — GG — No. 074/2014, EBIH — GG — No. 075/2014, EBIH — GG — No. 076/2014, dated February 24, 2014. Notes from EBIH REF: EBIH — GG — No. 092 and No. 116/2014 received on March 13 and April 10, 2014, respectively. The Report from the Economic Policy Advisory Unit REF: BCB-APEC-SMF-2014-17 of April 21, 2014.

The Report from the Monetary Operations Management REF: BCB-GOM-SOSP-DCE-INF-2014-22 of April 17, 2014.
The Report from the Legal Affairs Management REF: BCB-GAL-SANO-INF-2014-121 of April 21, 2014.

CONSIDERING:

That the Political Constitution of the State (CPE), approved by referendum on January 25, 2009, and promulgated on February 7, 2009, in item 6 of Article 9, establishes that it is the goal and function of the State to promote and guarantee the responsible and planned use of natural resources, and to boost their industrialization, through the development and strengthening of the productive base in its different dimensions and levels. Likewise, in item 10 of paragraph I of Article 158 and Article 322, it establishes that the Plurinational Legislative Assembly has the attribute to approve the contracting of public debt.

That Article 322 of the Political Constitution of the State provides that the Plurinational Legislative Assembly will authorize the contracting of public debt when the capacity to generate income to cover capital and interest is demonstrated, and the most advantageous conditions in terms of 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. 455, in its Article 13, authorizes the BCB to grant an extraordinary credit of up to Bs101,200,000.- (One Hundred One Million Two Hundred Thousand 00/100 Bolivianos), in favor of EBIH, on concessional conditions, with the objective of financing the project "Plant for Pipelines and Accessories for Natural Gas Networks — El Alto" and reimbursing the resources received under Supreme Decree No. 613 of August 25, 2010. For this purpose, the BCB is exempted from the application of Articles 22 and 23 of Law No. 1670 of October 31, 1995.

That within the framework of Paragraph I of the aforementioned Article and according to what is established by Item 10, Paragraph I of Article 158, and Article 322 of the CPE, EBIH is authorized to contract the aforementioned credit with the BCB.

That according to item III, the 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 EBIH.

That according to item IV, EBIH is responsible for the use and destination of the resources to be disbursed by the BCB, within the framework of Paragraph I of the aforementioned Article.

That according to item V, the Ministry of Public Economy and Finance (MEFP) is authorized, through the General Treasury of the Nation (TGN), to issue and grant Non-Negotiable Treasury Bonds in favor of the BCB to guarantee the amount of the credit granted by said entity in favor of EBIH, upon written request from the Head of Sector Ministry and jointly with the BCB.

That according to item VI, EBIH is exempted from the effects and scope of the application of Articles 33 and 35 of Law No. 2042 of December 21, 1999, on Budgetary Administration.

That in concordance with item VII, the MHE, through Ministerial Resolution, must justify to the BCB that the use and destination of the resources of the credit to be acquired by EBIH are of national priority within the framework of the National Development Plan and that future flows will be used for the payment of the credit indicated in the aforementioned Article.

That D.S. No. 0368 establishes that EBIH has the institutional nature of a National Strategic Public Enterprise.

That D.S. No. 0384 modifies item 0 of Article 6, Article 8, Article 10, the Single Transitional Provision, and incorporates the Single Additional Provision to D.S. No. 368.

That the M.R. of the MEFP No. 023 determines for the 2014 management, a value of at least 20%, as the degree of concessionality for Public Enterprises that access internal credits of the Central Bank of Bolivia in an extraordinary manner.

That the M.R. of the MHE No. 048 and No. 079 — 14, justify to the BCB the following: 1) According to the PGE — 2014 Law, the project "Plant for Pipelines and Accessories for Natural Gas Networks — El Alto" and the reimbursement of resources received under D.S. No. 613 of August 25, 2010, will be financed with a credit of Bs101,200,000.- (One Hundred One Million Two Hundred Thousand 00/100 Bolivianos), to be requested from the BCB, whose amount will be destined for investment in the Plant for Pipelines and Accessories for Natural Gas Networks — El Alto (Bs100,444,806.-) and for reimbursement of trust resources (Bs755,194.-). 2) Confirms the technical feasibility of the project "Plant for Pipelines and Accessories for Natural Gas Networks — El Alto" and the reimbursement of resources received under D.S. No. 613. 3) Determines that according to the economic and financial evaluation carried out through the General Directorate of Administrative Affairs of the MHE, the project: "Plant for Pipelines and Accessories for Natural Gas Networks — El Alto," justifies and ensures the payment capacity of the credit and establishes that the use and destination of the credit resources are of national priority within the framework of the National Development Plan and that future flows will be used for the payment of the credit. 4) Establishes that EBIH and the MHE, prior to the authorization of any disbursement of the credit resources, will sign an agreement with the purpose of establishing the technical, administrative, and financial conditions to operationalize the evaluation and monitoring of the execution of the credit resources. The MHE through the Vice Ministry of Industrialization, Commercialization, Transportation, and Storage of Hydrocarbons (VICTAH) and EBIH is obliged to provide all required information and documentation.

That the Regulation for the Concession of Credit to National Strategic Public Enterprises within the framework of the General State Budget Management 2010 and 2011, approved through Board Resolution of the BCB No. 023/11 and modified through Board Resolutions No. 026/11, No. 027/11, No. 030/11, No. 097/11, No. 039/12, No. 064/12, No. 024/13, and No. 008/14, has the object of regulating the granting of credits by the BCB in favor of the EPNE.

That Article 1 of Board Resolution No. 024/13 modifies the Regulation for the Concession of Credit to National Strategic Public Enterprises within the Framework of the PGE — Management 2010, 2011, and 2012, modifying the Regulation for the Approval of Credit to National Strategic Public Enterprises within the Framework of the General State Budget — Management 2010, 2011, 2012, and 2013.

That Board Resolution No. 144/13 approves modifications to the Regulation for the Concession of Credit to National Strategic Public Enterprises within the framework of the General State Budget — Management 2010, 2011, 2012, and 2013 and incorporates the Procedure to define the Discount Rate and the Degree of Concessionality in Credits to be granted to the EPNE.

That through Board Resolution No. 001/2014, the Board of Directors of EBIH approves the investment plan and the disbursement schedule of the credit resources to be granted by the BCB, to finance the execution of the project "Plant for Pipelines and Accessories for Natural Gas Networks — El Alto" and reimburse the resources received under Supreme Decree No. 613.

That through notes REF: EBIH — GG — No. 074, No. 75, and No. 76 /2014, EBIH informs the Ministry of Development Planning, the Ministry of Public Economy and Finance, and the Ministry of Hydrocarbons and Energy of the B.R. No. 001/2014.

That through note from EBIH REF: EBIH — GG — No. 092/2014 and within the framework of what is established by Article 13 of Law No. 455, it requests the BCB for the concession of a credit for an amount of Bs101,200,000 (One Hundred One Million Two Hundred Thousand 00/100 Bolivianos) to finance the project: "Plant for Pipelines and Accessories for Natural Gas Networks — El Alto" and proposes for the payment of the debt a term of 20 years, of which 5 years are for the grace period, and presents the proposed Disbursement Schedule and Payment Plan. Likewise, it attaches the documentation established in the Regulation for the approval of credit to National Strategic Public Enterprises.

That through note from EBIH REF: EBIH — GG — No. 116/2014, it corrects the observations made by the BCB specifying that it requests the credit with a grace period of 5 years on principal and interest and attaches a new disbursement schedule.

That the Economic Policy Advisory Unit points out in its report REF: BCB-APEC-SMF-2014-17 that to date, disbursements to EPNE in the 2014 management are below the total amount included in the monetary and fiscal program and if the disbursements foreseen for 2014 are considered, they do not constitute extraordinary operations that affect the fulfillment of the Monetary Program goals.

That the Monetary Operations Management recommends in its report REF: BCB-GOM-SOSP-DCE-INF-2014-22, to consider the interest rate scenarios presented for the approval of the financial conditions of the credit requested by EBIH and in case the request is considered favorably, EBIH must open the corresponding disbursement and payment accounts at the BCB through the MEFP.

That the Legal Affairs Management concludes in its report REF: BCB-GAL-SANO-INF-2014-121 that the request made by EBIH falls within what is provided by current regulations, Law No. 455, and to this effect, it has complied with the presentation of the documents required in Article 2 of the Regulation for the Concession of Credit to National Strategic Public Enterprises Management 2010, 2011, 2012, 2013, and 2014.

That Article 6 of the Regulation for the Concession of Credit to National Strategic Public Enterprises within the Framework of the PGE — Management 2010, 2011, and 2012 establishes that the Board of Directors of the BCB, considering the technical and legal reports, will consider the credit request and, if appropriate, approve it, through the favorable vote of two-thirds of its members present at the Board meeting, issuing the corresponding Resolution, and instructing the preparation and subsequent signing of the contract by the President of the BCB, prior to review and approval by the Board.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve within the framework of what is established in Article 13 of Law No. 455 of December 11, 2014, on the General State Budget — Management 2014 (PGE — 2014), of the antecedents and provisions described above, the granting of a concessional extraordinary credit to EBIH under the following terms and conditions:

Currency: Bolivianos.
Total Credit Amount: Bs101,200,000.- (One Hundred One Million Two Hundred Thousand 00/100 Bolivianos).
Term: 20 years.
Grace Period: 5 years on principal and interest. The interest accrued during the first five (5) years will be paid at the end of the fifth year in a single payment. From the sixth year onwards, payments will be annual.

[Signatures]
Alvaro Odriozola
Reynaldo Yujra Segales
La Paz, April 24, 2014
Marcelo
Rafael Boy
Estrada
Ibrahim Perez Alandia
Rosa de Marin Barrios

Annual Interest Rate: 0.62% (zero point sixty-two percent).
Deadline for disbursements: June 30, 2015.
Payment Plan: Annual
Guarantees: Non-Negotiable Treasury Bonds.

Article 2.- Authorize the President of the BCB to sign the contract with the Bolivian Company of Hydrocarbon Industrialization (EBIH) 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.