Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 119/2017

SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES CONCESSIONAL EXTRAORDINARY CREDIT TO THE NATIONAL ELECTRICITY COMPANY (ENDE) FOR Bs432,673,893.-

VIEWED:

• 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.
• Law No. 856 of the General State Budget – Management 2017 (PGE-2017) of November 28, 2016.
• Supreme Decree No. 3058 of January 22, 2017.
• Supreme Decree No. 3070 of February 1, 2017.
• Ministerial Resolution (R.M.) of the Ministry of Economy and Public Finances (MEFP) No. 578 of June 20, 2017.
• Ministerial Resolution (R.M.) of the Ministry of Energy (MEN) No. 005-17 of January 17, 2017.
• Ministerial Resolution (R.M.) of the Ministry of Energy (MEN) No. 098-17 of June 28, 2017.
• Board Resolution of the BCB No. 019/2016 of February 2, 2016, which approves the Regulation 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 the National Electricity Company (ENDE) No. 33/2016 of December 12, 2016.
• Board Resolution of the National Electricity Company (ENDE) No. 041/2016 of December 12, 2016.

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//2. B.R. No. 119/2017

• Notes from the MEN CITE: MEN17/06007 DESP/295, MEN17/06342 DESP/363 and MEN17/07129 DESP/399, received on June 7 and 30 and July 11, 2017.
• Note from ENDE CITE: ENDE-DGFN-6/22-17, received on June 8, 2017.
• Notes from ENDE CITE: ENDE-PREJ-1/3-17 and ENDE-PREJ-1/5-17, both dated January 18, 2017 and ENDE-DGFN-6/20-17 dated June 8, 2017.
• Note from the BCB CITE: BCB-GOM-SOSP-DCE-CE-2016-118 dated July 18, 2017.
• Note from ENDE CITE: ENDE-DGFN-8/53-17 dated August 22, 2017.
• Report from the Monetary Operations Management (GOM) CITE: BCB-GOM-SOSP-DCE-INF-2017-79 dated July 12, 2017.
• Report from the Legal Affairs Management (GAL) CITE: BCB-GAL-SANO-DLBCI-INF-2017-171 dated July 14, 2017.

CONSIDERING:

• That the Political Constitution of the State (CPE), promulgated on February 7, 2009, in item 6 of its 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 I item 10 of Article 158 and Article 322, it is established that the Plurinational Legislative Assembly has the attribute 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.
• Law No. 614 of the General State Budget Management 2015 of December 13, 2014, provides 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 compliance, understood to remain in effect until the complete execution of the credit.
• That Law No. 769, in its Article 9, Paragraph I authorizes the BCB to grant an extraordinary

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//3. B.R. No. 119/2017

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) in favor of ENDE, on concessional conditions, with the object 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 ENDE parent company, or by ENDE parent company associated with its affiliate and subsidiary companies. 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 in accordance with what is established by Article 158, Paragraph I, Item 10 and Article 322 of the CPE, ENDE is authorized to contract the referred credit with the BCB.

• That in item III of the cited article, the MEFP is authorized, 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 sector-leading Ministry and jointly with the BCB.
• That in accordance with item IV of the mentioned article, the Ministry of Hydrocarbons and 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 in accordance with item V, 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 in accordance with item VI of the same article, the MHE current MEN through R.M. 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 Law No. 856 in its Third Final Provision, leaves pending for application Article 12 of Law No. 614 of December 13, 2014, which establishes that any authorization established by General State Budget Law, for the Central Bank of Bolivia – BCB to grant extraordinary credits, as well as authorizations to the Ministry of Economy and Public Finances, to issue and grant Non-Negotiable Treasury Bonds through the General Treasury of the Nation – TGN as backing for the referred extraordinary credits, will not require any other legal authorization for their compliance, understood to remain in effect until the complete execution of the credit.
• That Supreme Decree No. 3058, in its Article 1, establishes 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 that State Portfolio and the Vice-ministries that form part of its structure.

# Central Bank of Bolivia
## Board of Directors

//4. B.R. No. 119/2017

That Supreme Decree No. 3070, which modifies Supreme Decree No. 29894 of February 7, 2009 and complements Supreme Decree No. 3058 of January 22, 2017, establishing in its additional first provision that for the purposes of the application of Supreme Decree No. 3058, the terms “energy” and/or “energy-related” will encompass the sectors of electrical energy, lithium, and nuclear energy, as applicable, and in its additional third provision it provides 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 electrical energy sectors, as applicable.

That R.M. of the MEFP No. 578 establishes for Public Companies that exceptionally access internal credits to be granted by the Central Bank of Bolivia, applicants for internal public debt, the Degree of Concessionality of at least 20% from the date of publication of this Ministerial Resolution.

That R.M. of the MEN No. 005-17, justifies to the BCB and resolves among others: 1) Determine that in accordance with Law No. 769 of December 17, 2015, of the PGE of the public sector for Fiscal Management 2016, the Complementary Project Combined Cycles Warnes Thermoelectric Plant to be executed by ENDE Corporation, will be financed with a credit of Bs432,673,893.- (Four Hundred Thirty-Two Million Six Hundred Seventy-Three Thousand Eight Hundred Ninety-Three 00/100 Bolivianos), to be requested from the BCB, whose amount will be destined to the Project. 2) Approve the technical feasibility of the Project, based on what was stated in the Technical Report MHE-VMEEA-DGE-INF-0103/2016, issued by the Vice-Ministry of Electricity and Alternative Energies - VMEEA. 3) Approve the economic-financial evaluation of the project contained in the financial report ENDE-IF-DGFN-12/1-16, based on what was stated in the Report MHE-DGAA-UFIN-INF-0105/2016, issued by the General Directorate of Administrative Affairs of the MHE current MEN, since the Project justifies and ensures the payment capacity of the credit contracted from the BCB and establishes that the use and destination of the resources of the credit to be acquired by ENDE Corporation are of national priority, within the framework of the “Patriotic Agenda of the Bicentennial 2025” elevated to the rank of Law No. 650 of January 15, 2015, and of the Economic and Social Development Plan 2016 – 2020 approved by Law No. 786 of March 9, 2016; and that the future cash 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 provided that the MHE current MEN will authorize the disbursement requests of ENDE Corporation to the BCB based on an evaluation and monitoring report issued for each disbursement, the MHE current MEN 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 current MEN, through the VMEEA, for the corresponding evaluation and monitoring.

That Ministerial Resolution (R.M.) of the Ministry of Energy (MEN) No. 098-17, homologates Ministerial Resolution No. 005-17 of January 17, 2017, through which it was determined that in accordance with Law No. 769 of December 17, 2015, of the General State Budget – PGE of the public sector for Fiscal Management 2016, the Project

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# Central Bank of Bolivia
## Board of Directors

//6. B.R. No. 119/2017

September 27, 2016.

That through note CITE: BCB-GOM-SOSP-DCE-CE-2016-118, the BCB communicates to ENDE the conditions approved by the Board and requests its acceptance.

That through note CITE: ENDE-DGFN-8/53-17, ENDE communicates that its Board accepts the conditions of the concessional credit approved by the BCB Board.

That the Monetary Operations Management recommends in its report CITE: BCB-GOM-SOSP-DCE-INF-2017-79, 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-2017-171, that the request made by ENDE falls within what is provided by current regulations, to this effect it has complied with the presentation of the documents required in Article 2 of the BCB Regulation for the Approval of Credits to National Strategic Public Companies in the Framework of the General State Budget and recommends putting the credit approval request presented by ENDE up for consideration by the Board.

That Article 8 of the Regulation 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 EPNE on the financial considerations, the BCB Board through 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:

### Article 1.- Approve within the framework of what is provided in Law No. 769 of the General State Budget – Management 2016 (PGE – 2016), of the antecedents and provisions described above, the granting of a concessional extraordinary credit in favor of ENDE, to finance the Complementary Project Combined Cycles Warnes Thermoelectric Plant, under the following terms and conditions:

| **Currency:** | Bolivianos. |
|-------------|-------------|
| **Total Credit Amount:** | Bs432,673,893.- (Four Hundred Thirty-Two Million Six Hundred Seventy-Three Thousand Eight Hundred Ninety-Three 00/100 Bolivianos). |

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//7. B.R. No. 119/2017

| **Term:** | 30 years from the first disbursement. |
|------------|----------------------------------------|
| **Grace Period on Principal:** | 3 years. |
| **Interest Rate:** | 1.31% (one point three one percent). |
| **Deadline for Disbursements:** | December 31, 2020. |
| **Payment Plan:** | Annual. |
| **Guarantees:** | Non-Negotiable Treasury Bonds. |

### Article 2.- Authorize the President of the BCB to sign the contract with the National Electricity 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, August 22, 2017

**Pablo Yamas Sanchez**  
**Sergio Velarde Vera**  
**Ronald Polo Rivero**  
**Abraham Pérez Alandia**  
**Luis Fernando Baudoin Olea**