Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 058/2016

SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES EXTRAORDINARY CONCESSIONAL CREDIT TO THE NATIONAL ELECTRIC COMPANY (ENDE) FOR Bs195,314,667.

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 (PGE-2015) of December 13, 2014.
• Law No. 769 of the General State Budget – Management 2016 (PGE-2016) of December 17, 2015.
• Ministerial Resolution (R.M.) of the Ministry of Economy and Public Finance (MEFP) No. 010 of January 5, 2016.
• Ministerial Resolution (R.M.) of the Ministry of Hydrocarbons and Energy (MHE) No. 011-16 of January 14, 2016.
• Board Resolution of the BCB No. 019/2016 of February 2, 2016, which approves the Regulations of the Central Bank of Bolivia for the Approval of Credits to National Strategic Public Companies within the framework of the General State Budget Laws.
• Board Resolution of ENDE No. 39/2015 of October 14, 2015.
• The note from the MHE CITE: MHE-00408 DGAJ-00009, received on January 15, 2016.
• The note from ENDE CITE: ENDE-PREJ-1/13-16, received on January 19, 2016.
• The notes from ENDE CITE: ENDE-PREJ-1/10, 11 and 12 – 16, all dated January 18, 2016.
• The Note from the BCB CITE: BCB-GOM-SOSP-DCE-CE-2016-45 of March 8, 2016.
• The Note from ENDE CITE: ENDE-PREJ-3/45-16, received on March 31, 2016.
• The Report from the Monetary Operations Management (GOM) CITE: BCB-GOM-SOSP-DCE-INF-2016-10 of March 3, 2016.
• The report from the Legal Affairs Management (GAL) CITE: BCB-GAL-SANO-DLBCI-INF-2016-46 of March 4, 2016.

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CONSIDERING:

That the Political Constitution of the State (CPE), approved by Referendum on January 25, 2009 and promulgated on February 7, 2009, in paragraph 6 of 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. Likewise, in paragraph 10 of paragraph I of Article 158 and Article 322, it establishes that the Plurinational Legislative Assembly has the attribution to approve the contracting of public debt.

That Article 322 of the CPE 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 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. 614, in its Article 19, Paragraph I, authorizes the BCB to grant an extraordinary credit of up to Bs11,662,000,000.- (Eleven Thousand Six Hundred Sixty-Two Million 00/100 Bolivianos) in favor of ENDE, under concessional conditions, with the object of financing investment projects for generation and transmission in the electricity sector oriented to increasing energy export capacity, which will be executed by its Subsidiary or Affiliate Companies through capital contributions. 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, Paragraph 10 and Article 322 of the CPE, ENDE is authorized to contract the referred credit with the BCB.

That in paragraphs III and IV of the cited article, it is established that the MHE is responsible for the evaluation and monitoring of the execution of the credit resources and that ENDE is responsible for the use and destination of the resources to be disbursed by the BCB.

That according to paragraph V, the 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 ENDE upon written request of the head ministry and jointly with the BCB.

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

That Law No. 769, in its Second Final Provision, extends the validity of Article 12 of Law No. 614 which determines that any authorization established by Law of the PGE, for

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the BCB to grant 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 the R.M. of the MEFP No. 010 determines for the 2016 management, a value of at least 20%, as the degree of concessionality for Public Companies that exceptionally access internal credits of the BCB.

That the R.M. of the MHE No. 011-16, justifies before the BCB and resolves among others: 1) Determine that according to the PGE Law – Management 2015, Law No. 614 of December 13, 2014, the Project “Laguna Colorada Geothermal Pilot Plant”, which will be executed by ENDE Corporation, will be financed with a credit of Bs195,314,667.- (One Hundred Ninety-Five Million Three Hundred Fourteen Thousand Six Hundred Sixty-Seven 00/100 Bolivianos), to be requested from the BCB, whose amount will be destined to the Project. 2) Confirm the technical feasibility of the execution of the Project, as stated in the Technical Report MHE-VMEEA-DGEA No. 00014/2015, issued by the Undersecretariat of Electricity and Alternative Energies (VMEEA). 3) Determine that according to the economic and financial evaluation carried out through Report DGAA No. 00571/15, issued by the General Directorate of Administrative Affairs of the MHE, ENDE justifies and ensures the payment capacity of the credit to be contracted with the BCB and establishes that the use and destination of the credit resources to be acquired by ENDE Corporation are of national priority within the framework of the National Development Plan and the Patriotic Agenda of the Bicentennial 2025; and that the future flows of the project mentioned in Paragraph I, will be used for the payment of the credit to be granted by the BCB. 4) It is ordered that the MHE will authorize the disbursement requests of ENDE Corporation before the BCB based on an evaluation and monitoring report issued for each disbursement, the MHE through the VMEEA will carry out the evaluation and monitoring of the physical and financial execution of the project, ENDE Corporation is obliged to provide all the information and documentation required by the MHE, through the VMEEA, for the corresponding evaluation and monitoring.

That the Regulations of the Central Bank of Bolivia for the Approval of Credit to National Strategic Public Companies within the framework of the General State Budget, approved by Board Resolution of the BCB No. 019/16, has the object of regulating the granting of credits by the BCB in favor of the SPNE.

That by B.D. No. 39/2015, the Board of Directors of ENDE approves the Investment Plan and the Disbursement Schedule of the credit resources to be granted by the BCB, for the execution of the Project “Laguna Colorada Geothermal Pilot Plant”.

That by note CITE: MHE-00408 DGAJ-00009, the MHE sends the Ministerial Resolution No. 011-16 of January 14, 2016, which has the object “To Determine that according to the General State Budget Law 2015 management, Law No. 614 of December 13, 2014, the Project “Laguna Colorada Geothermal Pilot Plant” will be executed by ENDE Corporation, with the financing of a credit of Bs195,314,667.-

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(One Hundred Ninety-Five Million Three Hundred Fourteen Thousand Six Hundred Sixty-Seven 00/100 Bolivianos), to be requested from the BCB.

That by note CITE: ENDE-PREJ-1/13-16, ENDE requests from the BCB the granting of an extraordinary concessional credit for Bs195,314,667.- (One Hundred Ninety-Five Million Three Hundred Fourteen Thousand Six Hundred Sixty-Seven 00/100 Bolivianos), to finance the Project: “Laguna Colorada Geothermal Pilot Plant”, for this effect, it attaches the documentation established in the Regulations for the Approval of Credit to National Strategic Public Companies within the framework of the General State Budget.

That by notes CITE: ENDE-PREJ-1/10, 11 and 12 – 16, ENDE informs the MEFP, MHE and Ministry of Development Planning, respectively, of a copy of the Board Resolution of ENDE No. 39/2015 of October 14, 2015.

That by note CITE: BCB-GOM-SOSP-DCE-CE-2016-45, the BCB communicates to ENDE the conditions approved by the Board and requests its acceptance.

That by note CITE: ENDE-PREJ-3/45-16, ENDE communicates the acceptance of the conditions of the concessional credit approved by the Board of the BCB.

That the Monetary Operations Management recommends in its report CITE: BCB-GOM-SOSP-DCE-INF-2016-10, to consider 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.

That the Legal Affairs Management concludes in its report CITE: BCB-GAL-SANO-DLBCI-INF-2016-46 that the request made by ENDE falls within what is provided for by the current regulations, for this effect it has complied with the presentation of the documents required in Article 2 of the Regulations for the Approval of Credit to National Strategic Public Companies in the Framework of the General State Budget and recommends putting before the Board the credit approval request presented by ENDE.

That Article 8 of the Regulations of the Central Bank of Bolivia for the Approval of Credit to National Strategic Public Companies in the Framework of the General State Budget Laws establishes that upon receiving the conformity of the SPNE on the financial considerations, the Board of the BCB by Resolution will approve the granting of the credit, 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:

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Article 1.- Approve within the framework of what is established in Law No. 614 of December 13, 2014 of the General State Budget – Management 2015 (PGE – 2015) and Law No. 769 of the General State Budget – Management 2016 (PGE – 2016), of the antecedents and provisions described above, the granting of an extraordinary concessional credit in favor of ENDE, to finance the Project “Laguna Colorada Geothermal Pilot Plant”, under the following terms and conditions:

Concept	Value
Currency:	Bolivianos.
Total Credit Amount:	Bs195,314,667.- (One Hundred Ninety-Five Million Three Hundred Fourteen Thousand Six Hundred Sixty-Seven 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:	December 31, 2018.
Payment Plan:	Annual.
Guarantees:	Non-Negotiable Treasury Bonds.

Article 2.- Authorize the President of the BCB to sign the contract with the National Electric Company (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, April 5, 2016

Marcelo Zabalaga Estrada

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• Sergio Velarde Vera
• Ronald Polo Rivero
• Abraham Pérez Alandia
• Reynaldo Yujra Segales