Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 102/2018

SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES CONCESSIONAL EXTRAORDINARY CREDIT IN FAVOR OF THE NATIONAL ELECTRICITY COMPANY (ENDE) FOR Bs109,511,595.- PROJECT “LA VENTOLERA WIND GENERATION CONSTRUCTION”

VISTOS:

• The Political Constitution of the State promulgated on February 7, 2009.
• Law No. 1670, of October 31, 1995, of the Central Bank of Bolivia (BCB).
• Law No. 614, of December 13, 2014, of the General State Budget – Management 2015.
• Law No. 769, of December 17, 2015, of the General State Budget – Management 2016.
• Law No. 1006, of December 20, 2017, of the General State Budget – Management 2018.
• Supreme Decree No. 3058, of January 22, 2017.
• Supreme Decree No. 3070, of February 1, 2017.
• Ministerial Resolution No. 578 of June 20, 2017, issued by the Ministry of Economy and Public Finance (MEFP).
• Ministerial Resolution No. 084-18 of May 23, 2018, issued by the Ministry of Energy (MEN).
• Board Resolution No. 019/2016, of February 2, 2016, issued by the BCB, which approves the Regulations of the Central Bank of Bolivia for the Approval of Credits to National Strategic Public Enterprises within the framework of the General State Budget Laws.
• Board Resolution No. 008/2018 of March 23, 2018, issued by the National Electricity Company (ENDE).
• Notes from the Electricity Company: ENDE-DGFN-6/60-18 and ENDE-DGFN-7/23-18, received on June 22 and July 10, 2018, respectively.
• Notes from the Electricity Company: ENDE-DGFN-6/57-18, ENDE-DGFN-6/58-18 and

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ENDE-DGFN-6/59-18, all dated June 20, 2018, sent to the Ministry of Development Planning (MPD), the MEN, and the MEFP, respectively.

• The note from the Monetary Operations Management BCB-GOM-SOSP-DCE-CE-2018-150, of July 12, 2018.
• The note from the Electricity Company ENDE-DGFN-8/5-18, of August 7, 2018.
• The Report from the Monetary Operations Management BCB-GOM-SOSP-DCE-INF-2018-133, of July 11, 2018.
• The Report from the Legal Affairs Management BCB-GAL-SANO-DLBCI-INF-2018-211, of July 12, 2018.

CONSIDERING:

• That Article 9, numeral 6 of the Political Constitution of the State (CPE) 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 the development and strengthening of the productive base in its different dimensions and levels.
• That Article 158, paragraph I, numeral 10 and Article 322 of the CPE provide that the Plurinational Legislative Assembly will authorize the contracting of public debt when it is demonstrated that there is the capacity to generate income to cover the principal and interest, 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 Articles 44 and 54 subsections a) and q) of Law No. 1670, of October 31, 1995, of the Central Bank of Bolivia, establish that the highest authority of the BCB is its Board of Directors, which is responsible for defining its policies, specialized regulations of general application, and internal rules, as well as for establishing administrative, operational, and financial strategies of the BCB; therefore, it is empowered to adopt general decisions that may be necessary for the BCB to fulfill its functions, powers, and competencies recognized by law.
• That Article 12 of Law No. 614, of December 13, 2014, of the General State Budget – Management 2015, establishes that any authorization established by General State Budget Law for the BCB to grant extraordinary credits, as well as 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 effect until the complete execution of the credit.
• That Article 9, paragraph I of Law No. 769, of December 17, 2015, of the

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General State Budget – Management 2016, 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) on concessional conditions in favor of ENDE, with the objective of financing investment projects for generation and transmission in the energy sector, or generation projects to be executed by its subsidiary or affiliate companies through capital contributions or by the parent ENDE, or by parent ENDE associated with its affiliate and subsidiary companies. For this purpose, it exempts the BCB from the application of Articles 22 and 23 of Law No. 1670 of October 31, 1995. Likewise, it disposes, in accordance with what is established by Article 158, paragraph I, numeral 10 and Article 322 of the CPE, to authorize ENDE to contract the referred credit with the BCB.

• That Article 9, paragraph III of the aforementioned law, authorizes the MEFP 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 Article 9, paragraph IV of the aforementioned law, establishes that the Ministry of Hydrocarbons and Energy (currently the Ministry of Energy) 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 Article 9, paragraph V of the aforementioned law, determines that 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 Article 9, paragraph VI of the aforementioned law, provides that the MEN through Ministerial Resolution must justify to 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 cash flows will be used for the payment of the credit.
• That the fourth final provision, subsection n) of Law No. 1006, of December 20, 2017, of the General State Budget – Management 2018, establishes that Article 12 of Law No. 614 remains pending for application.
• That Article 1 of Supreme Decree No. 3058, of January 22, 2017, provides for 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 attributions of said State Portfolio and the Vice-Ministries that form part of its structure.
• That the first additional provision of Supreme Decree No. 3070, of February 1, 2017, which modifies Supreme Decree No. 29894 and complements Supreme Decree No.

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3058, establishes that for the purposes of the application of Supreme Decree No. 3058, the terms “energy” and/or “energy-related” will encompass the sectors of electricity, lithium, and nuclear energy, as applicable; and in its third additional provision it disposes that the functions, attributions, and competencies of the former Ministry of Hydrocarbons and Energy will be assumed by the Ministry of Hydrocarbons and the MEN, in the hydrocarbons and electricity sectors, respectively.

• That Ministerial Resolution No. 578, of June 20, 2017, issued by the MEFP, establishes that for Public Enterprises requesting internal public debt, which exceptionally access internal credits to be granted by the BCB, the Degree of Concessionality is at least 20% from the date of publication of said Resolution.
• That Ministerial Resolution No. 084-18, of May 23, 2018, issued by the MEN, justifies to the BCB that the use and destination of the resources of the credit to be acquired by ENDE are of national priority and resolves: 1) To determine that in accordance with Law No. 769, of December 17, 2015, the Project “La Ventolera Wind Generation Construction” will be executed by ENDE, will be partially financed with a credit of Bs109,511,595.00 (One Hundred Nine Million Five Hundred Eleven Thousand Five Hundred Ninety-Five 00/100 Bolivianos), to be requested from the BCB, an amount that will be destined to the Project; 2) To approve the technical feasibility of the Project, in accordance with what is stated in the Technical Report ENDE-IT-UEPI-3/11-18, of March 8, 2018 and the Technical Report MEN/MEEEA/DGEEA/INF-0067/2018, of April 30, 2018; 3) To approve the economic-financial evaluation of the project contained in the Financial Report ENDE-IF-GDEE-3/2-18, of March 8, 2018 and what was manifested by the Financial Report MEN/DGAA/UFIN/INF-0036/2018, of May 4, 2018, 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 is of national priority within the framework of the “Patriotic Agenda for the Bicentennial 2025” elevated to the rank of law through the promulgation of Law No. 650, of January 19, 2015, and the “Economic and Social Development Plan 2016 – 2020”, approved by Law No. 786, of March 9, 2016; and that the cash flows contained in the reports mentioned 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 through the Vice-Ministry of Electricity and Alternative Energies – VMEEA, will authorize ENDE’s disbursement requests to the BCB, based on an evaluation and monitoring report that must be issued for each disbursement; the MEN through the 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 required by the MEN 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 Enterprises within the framework of the General State Budget, approved by Board Resolution of the BCB No. 019/2016, of February 2,

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February 2016, aims to regulate the granting of credits by the BCB in favor of the SPNE. Likewise, in its Article 8 it establishes that upon receipt of the SPNE’s conformity on the financial considerations, the Board of Directors of the BCB through Resolution will approve the granting of the credit, with the favorable vote of two-thirds of its members present at the respective meeting and will authorize the President of the BCB to sign the respective contract.

• That by Board Resolution No. 008/2018, of March 23, 2018, 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 “La Ventolera Wind Generation Construction”.
• That by note ENDE-DGFN-6/60-18, ENDE requests from the BCB the granting of a concessional extraordinary credit for Bs109,511,595.00 (One Hundred Nine Million Five Hundred Eleven Thousand Five Hundred Ninety-Five 00/100 Bolivianos), to finance the Project “La Ventolera Wind Generation Construction”, for which effect it attaches the documentation established in the Regulations of the Central Bank of Bolivia for the Approval of Credits to National Strategic Public Enterprises within the framework of the General State Budget Laws.
• That by note ENDE-DGFN-7/23-18, ENDE rectifies the observations made by the BCB clarifying the correct name of the Regulations and attaches the corrected Board Resolution No. 008/2018.
• That by notes ENDE-DGFN-6/57-18, ENDE-DGFN-6/58-18 and ENDE-DGFN-6/59-18, ENDE informs the MPD, the MEN, and the MEFP, respectively, of the copy of the Board Resolution of ENDE No. 008/2018, of March 23, 2018.
• That by note BCB-GOM-SOSP-DCE-CE-2018-150, the BCB communicates to ENDE the conditions approved by the Board and requests its acceptance.
• That by note ENDE-DGFN-8/5-18, ENDE communicates that its Board accepts the conditions of the concessional credit approved by the Board of the BCB.
• That by Report BCB-GOM-SOSP-DCE-INF-2018-133, of July 11, 2018, the GOM of the BCB recommends considering 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 by Report BCB-GAL-SANO-DLBCI-INF-2018-211, of July 12, 2018, the GAL of the BCB concludes that the request made by ENDE falls within what is provided by the current regulations, therefore it is established that ENDE has complied with the presentation of the documentation provided in Article 2 of the Regulations of the Central

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Bank of Bolivia for the Approval of Credits to National Strategic Public Enterprises within the framework of the General State Budget Laws, corresponding to the Board the determination and approval of the financial conditions of the credit considering the request of ENDE, the recommendations made by the technical area, and the degree of concessionality established by the MEFP through Ministerial Resolution for each management period. Likewise, once the financial conditions are accepted by ENDE, the Highest Authority of the Institution through Resolution must approve the request for granting the credit, with the favorable vote of two-thirds of the votes of the members present in the meeting and authorize the President of the BCB to sign the Contract as provided in Article 8 of the aforementioned Regulations.

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 December 17, 2015, of the General State Budget – Management 2016 and Law No. 1006, of December 20, 2017, of the General State Budget – Management 2018, of the antecedents and provisions described above, the granting of a concessional extraordinary credit in favor of ENDE, to finance the Project “La Ventolera Wind Generation Construction”, under the following terms and conditions:

Concept	Detail
Currency:	Bolivianos.
Total Credit Amount:	Bs109,511,595.00 (One Hundred Nine Million Five Hundred Eleven Thousand Five Hundred Ninety-Five 00/100 Bolivianos).
Term:	30 years from the first disbursement.
Grace Period on Principal:	5 years.
Interest Rate:	1.44% (one point four four percent).
Disbursement Deadline:	March 31, 2021.
Payment Plan:	Annual.
Guarantees:	Non-Negotiable Treasury Bonds.

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

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

La Paz, August 7, 2018

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