Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 039/2015

SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES MODIFICATIONS TO THE REGULATION FOR THE APPROVAL OF CREDIT TO STRATEGIC NATIONAL PUBLIC ENTERPRISES WITHIN THE FRAMEWORK OF THE GENERAL STATE BUDGET – MANAGEMENT YEARS 2010, 2011, 2012, 2013 AND 2014.

VIEWED:

Law No. 1670, of October 31, 1995, of the Central Bank of Bolivia (BCB).

The Statute of the BCB, approved by Board Resolution No. 128/2005, of October 21, 2005, and its subsequent modifications.

Board Resolution No. 023/2011, of February 22, 2011, which approves the Regulation for the Granting of Credit to Strategic National Public Enterprises within the framework of the General State Budget – Management Years 2010 and 2011, modified by Board Resolutions No. 026/2011 of March 2, 2011, No. 027/2011 of March 18, 2011, No. 030/2011 of March 22, 2011, No. 097/2011 of August 9, 2011, No. 039/2012 of March 23, 2012, No. 064/2012 of May 29, 2012, No. 024/2013 of March 12, 2013, No. 144/2013 of October 15, 2013, No. 008/2014 of January 28, 2014, and No. 040/2014 of April 29, 2014.

Law No. 614 of December 13, 2014, which approves the General State Budget for the 2015 management year (PGE – 2015).

Reports from the Monetary Operations Management CITE: BCB-GOM-SOSP-DCE-INF-2015-9 and BCB-GOM-SOSP-DCE-INF-2015-11 of March 13 and 16, 2015.

Report from the Legal Affairs Management CITE: BCB-GAL-SANO-INF-2015-104 of March 16, 2015.

CONSIDERING:

That by Board Resolution No. 023/2011, the BCB Board of Directors approved the Regulation for the Granting of Credit to Strategic National Public Enterprises within the framework of the General State Budget – Management Years 2010 and 2011, which was modified by Board Resolutions No. 026/2011, No. 027/2011, No. 030/2011, No. 097/2011, No. 039/2012, No. 064/2012, No. 024/2013, No. 144/2013, No. 008/2014, and

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No. 040/2014, with the objective of regulating the granting of credits in favor of Strategic National Public Enterprises (EPNE).

That Law No. 614, which approves the PGE – 2015, in its article 12 determines that any authorization established by Law of the PGE, for the BCB to grant extraordinary credits, will not require any other legal authorization for its compliance, understanding that they remain in effect until the complete execution of the credit. Its article 19 authorizes the BCB to grant an extraordinary credit of up to Bs11,662,000,000.- (Eleven Million Six Hundred Sixty-Two Million 00/100 Bolivianos), in favor of the National Electricity Company – ENDE, on concessional conditions.

That within the framework of what is provided by Law No. 614, for the consideration of new credit requests to be presented by the EPNE, it is necessary to adapt the Regulation for the Approval of Credit to Strategic National Public Enterprises within the framework of the General State Budget – Management Years 2010, 2011, 2012, 2013 and 2014, incorporating the provisions of the aforementioned PGE Law – 2015.

That in Report BCB-GOM-SOSP-DCE-INF-2015-9, the Monetary Operations Management recommends excluding from the Regulation the presentation of the Technical Report from the Economic Policy Advisory on the impact of the credit on the monetary program, considering: that there is no requirement to meet monetary program targets in the laws originating the credits to the EPNE; that the scheduled disbursements for the EPNE are very high in relation to the CIN target for the Non-Financial Public Sector; that it is not possible to specify the moment when the effects of the credits to the EPNE on the BCB's monetary program targets will materialize; that there are delays in the application of measures in liquidity control.

Likewise, in the aforementioned report, it is requested to regulate the payment by the EPNE of the expenses demanded by the protocolization procedures of the credit contracts, due to observations from external audit, regarding the non-compliance with this obligation by these companies.

That the Monetary Operations Management through report CITE: BCB-GOM-SOSP-DCE-INF-2015-11, concludes that it is necessary to adapt the Regulation for the approval of credit to the EPNE to the current legal framework, according to what is established in Law No. 614 of the PGE – 2015 and recommends to the Board of Directors consider the modification of the title of the Regulation and its article 1.

That the Legal Affairs Management through report CITE: BCB-GAL-SANO-INF-2015-104, concludes that the proposal for the adaptation of the Regulation for the Approval of Credits to Strategic National Public Enterprises to Law No. 614 of the PGE -2015 is appropriate, being the competence of the BCB Board of Directors to consider its approval by two

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two-thirds of the votes of all its members, in accordance with what is established in article 54 item o) of Law No. 1670 and article 24 of the Institution's Statute.

That article 11 numeral 29 of the BCB Statute, concordant with article 54 item o) of Law No. 1670, establishes that the Board of Directors has the authority to approve, modify and interpret the Statute and regulations by two-thirds of the votes of its members, without the need for any additional administrative act.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Modify the denomination of the “Regulation for the Approval of Credit to Strategic National Public Enterprises within the framework of the General State Budget – Management Years 2010, 2011, 2012, 2013 and 2014” in the following terms:

IT SAYS:

“REGULATION FOR THE APPROVAL OF CREDIT TO STRATEGIC NATIONAL PUBLIC ENTERPRISES WITHIN THE FRAMEWORK OF THE GENERAL STATE BUDGET – MANAGEMENT YEARS 2010, 2011, 2012, 2013 AND 2014”

IT SHOULD SAY:

“REGULATION FOR THE APPROVAL OF CREDIT TO STRATEGIC NATIONAL PUBLIC ENTERPRISES WITHIN THE FRAMEWORK OF THE GENERAL STATE BUDGET – MANAGEMENT YEARS 2010, 2011, 2012, 2013, 2014 AND 2015”

Article 2.- Modify article 1 of the Regulation for the Approval of Credit to Strategic National Public Enterprises within the framework of the General State Budget – Management Years 2010, 2011, 2012, 2013 and 2014, in the following manner:

IT SAYS:

“Article 1.- (Object)

This Regulation aims to regulate the granting of credits by the Central Bank of Bolivia (BCB) in favor of Strategic National Public Enterprises (EPNE), within the framework of what is provided in the General State Budget

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Management 2010, reformed by Law No. 50, of October 9, 2010; the 2011 Budget approved by Law No. 62, of November 28, 2010; the 2012 Budget approved by Law No. 211, of December 23, 2011; the 2013 Budget approved by Law No. 317, of December 11, 2012 and the 2014 Budget approved by Law No. 455, of December 11, 2013.”

IT SHOULD SAY:

“Article 1.- (Object)

This Regulation aims to regulate the granting of credits by the Central Bank of Bolivia (BCB) in favor of Strategic National Public Enterprises (EPNE), within the framework of what is provided in the General State Budget Management 2010, reformed by Law No. 50, of October 9, 2010; the 2011 Budget approved by Law No. 62, of November 28, 2010; the 2012 Budget approved by Law No. 211, of December 23, 2011; the 2013 Budget approved by Law No. 317, of December 11, 2012, the 2014 Budget approved by Law No. 455, of December 11, 2013 and the 2015 Budget approved by Law No. 614, of December 13, 2014.”

Article 3.- Modify article 5 of the Regulation for the Approval of Credit to Strategic National Public Enterprises within the framework of the General State Budget – Management Years 2010, 2011, 2012, 2013 and 2014, in the following manner:

IT SAYS:

“Article 5.- (Reports for approval)

Upon receipt of the request and the documentation established in article 2 of this regulation, prior to the consideration of the Board of Directors, the President of the BCB will request the following reports:

a) Technical report on the impact of said credit on the monetary program, to the Economic Policy Advisory (APEC).

b) Technical report on the financial conditions to the Monetary Operations Management (GOM).

c) Legal report regarding compliance with regulations and presentation of documentation required for the granting of credit.

d) Other areas of the BCB, as required.”

IT SHOULD SAY:

“Article 5.- (Reports for approval)

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Upon receipt of the request and the documentation established in article 2 of this regulation, prior to the consideration of the Board of Directors, the President of the BCB will request the following reports:

a) Technical report on the financial conditions to the Monetary Operations Management (GOM).

b) Legal report regarding compliance with regulations and presentation of documentation required for the granting of credit.

c) Other areas of the BCB, as required.”

Article 4.- Modify article 8 of the Regulation for the Approval of Credit to Strategic National Public Enterprises within the framework of the General State Budget – Management Years 2010, 2011, 2012, 2013 and 2014, in the following manner:

IT SAYS:

“Article 8.- (Contract)

The conditions of the credit approved by the BCB Board of Directors will be recorded in the contract to be signed in a public document before the Notary of the Governor.

The protocolization procedures of the Contract will be carried out by the BCB and the expenses demanded by these procedures will be covered by the EPNE.”

IT SHOULD SAY:

“Article 8.- (Contract)

The conditions of the credit approved by the BCB Board of Directors will be recorded in the contract to be signed in a public document before the Notary of the Governor.

The protocolization procedures of the Contract will be carried out by the BCB. The expenses demanded by these procedures will be covered by the EPNE up to six months after the contract is signed in order to give continuity to the corresponding disbursement requests.”

Article 5.- The adjustments to the Regulation for the Approval of Credit to Strategic National Public Enterprises within the framework of the General State Budget – Management Years 2010, 2011, 2012, 2013, 2014 and 2015, will enter into effect from the date of approval of this Resolution.

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Article 6.- The Presidency and the General Management are entrusted with the execution and compliance of this Resolution.

La Paz, March 17, 2015

Marcelo Zabalaga Estrada Sergio Velarde Vera Abraham Pérez Alandia Ronald Polo Rivero