Board Resolution No. 104/2009

BOARD RESOLUTION NO. 104/2009 SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES CONCESSIONAL EXTRAORDINARY CREDIT TO YACIMIENTOS PETROLÍFEROS FISCALES BOLIVIANOS FOR AN AMOUNT OF USD 1,000,000,000.-

HAVING SEEN: The Political Constitution of the State sanctioned by Law No. 2650 of April 13, 2004. 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. The General National Budget for the 2009 management period (GNB-2009). The Bi-Ministerial Resolution of the Ministries of Economy and Public Finance and of Development Planning No. 001-A of April 8, 2009. The note cited MEFP/VTCP/DGCP-66/09-2009 of July 10, 2009 from the Ministry of Economy and Public Finance. The note cited YPFB-PRS-AG No. 36/09 of July 20, 2009 from Yacimientos Petrolíferos Fiscales Bolivianos (YPFB). The note cited DNNI – 028/2009 of August 18, 2009 from YPFB. The BCB Board Act No. 034/2009 of August 25, 2009. The note cited PRS-DNNI-040/09 of August 31, 2009 from YPFB. The note cited PRS-DNNI-041/09 of August 31, 2009 from YPFB. The note cited YPFB-PRS-AG No. 064/09 of September 2, 2009 from YPFB to which is attached the YPFB Board Resolution No. 30/2009 of September 2, 2009.

//2. B.R. No. 104/2009 The note cited PRS/DLG – 1398/2009 of September 4, 2009 from YPFB. The Reports from the Economic Policy Advisory APEC/SMyF – 023/2009 of September 4, 2009 and APEC/SMyF - 024/2009 of September 8, 2009. The Report from the Monetary Operations Management GOM – SOSP – DCE 005/2009 of September 2, 2009. The Report from the Legal Affairs Management SANO No. 264/2009 of September 4, 2009.

CONSIDERING: That the aforementioned Political Constitution of the State in force at the time of the promulgation of the GNB-2009, provided in its article 147 that the Executive Power will present to the Legislative Power, within the first thirty ordinary sessions, the draft Laws of the national and departmental budgets, which must be considered by Congress within a term of sixty days of receipt, upon expiration of this term, without the projects having been approved, these shall have the force of Law.

That the GNB-2009 under the shelter of what is established by article 147 (paragraph III) of the aforementioned Political Constitution of the State, has the force of Law, so that all its provisions, including that provided in article 46, are mandatory for all entities of the public sector, including the BCB.

That the GNB –2009 in its article 46 establishes that: “The Central Bank of Bolivia is authorized to grant an extraordinary credit up to the equivalent of $US1,000,000,000.- (One Thousand Million 00/100 United States Dollars), in favor of Yacimientos Petrolíferos Fiscales Bolivianos under concessional conditions, with the exclusive object of financing investment projects in the hydrocarbon sector, within the framework of energy security. For this effect, the Central Bank of Bolivia is exempted from the application of articles 22 and 23 of Law No. 1670 of October 31, 1995” referring to the prohibition of granting credits to the Public Sector and the need to document through negotiable debt securities issued by the TGN, respectively.

That the GNB –2009 in its article 36 authorizes the Executive Organ through the Ministry of Economy and Public Finance, to incorporate in the GNB-2009, the income, expenses and investments generated by the functioning of strategic national public companies (EPNE). Likewise, said norm expressly states that the Ministry of Economy and Public Finance and the head sector Ministry of the EPNE will establish the mechanisms for monitoring and controlling the use of resources of these.

//3. B.R. No. 104/2009 That the Political Constitution of the State promulgated on February 7, 2009 does not contemplate provisions that prevent the granting of the credit or the capacity of the parties.

That through Bi-Ministerial Resolution No. 001-A of April 8, 2009, the Ministries of Economy and Public Finance and of Development Planning approved the Regulation for the Evaluation and Monitoring of Strategic National Public Companies, with the object of regulating the monitoring and control of the use of credit resources, whose superior instance of evaluation and monitoring corresponds to the Ministries of Development Planning, of Economy and Public Finance and of Hydrocarbons and Energy.

That the Ministry of Economy and Public Finance through its note cited MEFP/VTCP/DGCP-66/09-2009 requests the BCB to initiate the corresponding actions to comply with what is established in article 46 of the GNB-2009, referred to the internal credit in favor of YPFB for the equivalent of USD1,000,000,000.- (One Thousand Million 00/100 United States Dollars).

That through note cited YPFB-PRS-AG No. 36/09, YPFB requests to operationalize the internal credit of USD1,000,000,000.-, through the loan agreement to be granted by the BCB in favor of the referred entity.

That by virtue of note cited DNNI – 028/2009, YPFB submits a preliminary summary of the Investment Plan of the resources of the credit to be granted by the BCB.

That in accordance with what is established in point 2 of Board Act No. 034/2009, the Highest Authority of the BCB instructed to continue the negotiations for the extraordinary credit of USD1,000,000,000.- based on the following guidelines:

• Approval of the Investment Plan.
• Guarantee of the loan.
• Financial conditions.

That YPFB through note cited PRS-DNNI-040/09 informed the Ministry of Hydrocarbons and Energy about the coordination work carried out by the technical teams of its Institution and representatives of the BCB, to facilitate the signing of the credit contract within the framework of what is established in the GNB-2009.

That YPFB by virtue of note cited PRS-DNNI-041/09, states that although the Investment Plan is being adjusted, it is important to have the credit contract signed by both institutions, so it requests the BCB to take the corresponding administrative actions so that the mentioned contract is signed as soon as possible, incorporating a clause that determines that the first disbursement will be subject to the

//4. B.R. No. 104/2009 approval of the Investment Plan by the YPFB Board and to the notification of the Ministries of Hydrocarbons, Economy and Public Finance and of Development Planning.

That through note cited YPFB-PRS-AG No. 064/09, YPFB brings to the knowledge of the BCB the Resolution of its Board No. 030/2009 of September 2, 2009, by which the credit operation of USD1,000,000,000.- to be granted by the BCB in favor of the referred entity is authorized and empowers its Executive President to continue with the corresponding actions for the effective realization of the credit.

That the Economic Policy Advisory (APEC) in its Report APEC/SMyF – 024/2009, at the time of carrying out an evaluation on the impact of the credit in the Monetary Program, establishes that both at the signing of the contract and when disbursements are made according to a pre-established schedule and are credited to an account created for YPFB at the BCB exclusively for this operation, there will be no effect on any of the variables of the 2009 Monetary Program agreed with the Ministry of Economy and Public Finance. Likewise, it states that when YPFB uses the funds, the monetary effect of this operation would only be observed. In case the resources are destined for import payments, it would be reflected in a decrease in RIN. If the resources are destined for internal payments in national currency, the counterpart of the decrease in deposits would be an increase in monetary emission.

That based on the aforementioned background, APEC concludes that with respect to the impact of the BCB credit to YPFB in the 2009 Monetary Program, the planned disbursement of USD27,600,000.- (twenty-seven million six hundred thousand 00/100 United States Dollars) will not affect the fulfillment of the variables subject to measurement in said Program, due to the disbursement being less than the amount provided in the Program and taking into account that the SPNF accumulated significant margins in the first semester. Likewise, it recommends that the remaining amount be included in the Monetary Programs of the upcoming management periods, according to the Investment Projects Schedule of YPFB to be financed with BCB credit.

That the Monetary Operations Management states in its Report GOM – SOSP – DCE 005/2009 that the financial conditions presented meet the concessional character that the credit must have according to the GNB 2009 Law, maintaining a relationship with the recovery of the credit in the shortest possible time.

That in the aforementioned report from GOM, it is concluded that it is necessary to enable a specific account in the name of YPFB to disburse the credit resources, prior to YPFB's request through the Ministry of Economy and Public Finance and the fulfillment of all requirements established by the BCB Board for this effect. Likewise, a specific account must be enabled to provision resources for the payment of the credit service (Capital and interest). In the corresponding credit contract, the guarantees and possible mechanisms must be established that ensure the amortization of the capital and the payment of the corresponding interest.

//5. B.R. No. 104/2009 That the Legal Affairs Management in its Report SANO No. 264/2009, concludes that there is no legal impediment for the BCB Board to consider the approval of the granting of the credit in favor of YPFB in compliance with what is established in article 46 of the GNB-2009, determining the financial conditions, by simple majority of votes of its members present in the meeting, as established by article 24 of the BCB Statute.

That by virtue of what is provided in articles 44 and 54 subsections a) and q) of Law No. 1670, the BCB Board is the competent instance to authorize the granting of the extraordinary credit in favor of YPFB, having to consider and establish the conditions and terms to which the referred credit will be subject, in order to comply with what is expressly disposed in the GNB-2009.

THEREFORE, THE BOARD OF THE CENTRAL BANK OF BOLIVIA RESOLVES:

Article 1.- Approve within the framework of Article 46 of the GNB-2009, the granting of a concessional extraordinary credit to YPFB under the following terms and conditions: Currency: United States Dollars of North America. Total Credit Amount: Up to USD1,000,000,000.- (One thousand million 00/100 United States Dollars) Term: 20 years Grace Period: 5 years on capital with interest payable from the first disbursement Annual Interest Rate: 1% (one percent) Disbursement Deadline: Until December 31, 2012 Payment Schedule: Semi-annual

Article 2.- Authorize the President of the BCB to sign the contract with Yacimientos Petrolíferos Fiscales Bolivianos under the terms of this Resolution.

//6. B.R. No. 104/2009

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

La Paz, September 8, 2009

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Gabriel Loza Tellería

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Gustavo Blacutt Alcalá Hugo Dorado Araníbar

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Rolando Marín Ibáñez Ernesto Yáñez Aguilar

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Rafael Boyán Téllez