Board Resolution No. 130/2013

BOARD RESOLUTION NO. 130/2013

SUBJECT: MONETARY OPERATIONS MANAGEMENT — APPROVES THE MODIFICATION TO THE SPECIFIC REGULATION FOR THE GRANTING OF CREDIT PROVIDED FOR IN LAW NO. 317.

HAVING SEEN:

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. 317 of December 11, 2013, which approves the General State Budget for the 2013 management period (PGE-2013).

Board Resolution No. 041/2013 of April 23, 2013, which approved the Specific Regulation for the Granting of Credit provided for in Law No. 317.

Law No. 396 of August 28, 2013, which modifies the General State Budget PGE-2013.

The Report from the Monetary Operations Management BCB-GOM-SOSP-INF-2013-6 of September 16, 2013.

The Report from the Legal Affairs Management BCB-GAL-SANO-INF-2013-317 of September 13, 2013.

CONSIDERING:

That the Political Constitution of the State (CPE) establishes in Article 158, paragraph I, numeral 10, that the Plurinational Legislative Assembly has the attribute to approve the contracting of loans that commit the general revenues of the State.

That Article 322 of the Political Constitution of the State provides that the Plurinational Legislative Assembly will authorize the contracting of public debt when the capacity to generate income to cover the principal and interest is demonstrated, 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 22 and 23 of Law No. 1670 determine that the BCB cannot grant credits to the Public Sector or incur contingent liabilities in its favor, except in favor of the General Treasury of the Nation (TGN) to attend to urgent needs derived from declared public calamities, internal or international commotion by Supreme Decree, and to attend to temporary liquidity needs, within the limits of the monetary program; these operations will be documented in all cases through negotiable public debt securities issued by the National Treasury.

That paragraph I of Article 26 of Law No. 317, within the framework of Articles 158 and 322 of the Political Constitution of the State, authorizes the Ministry of Economy and Public Finance, through the General Treasury of the Nation, to contract a credit with the BCB in national currency for an amount up to Bs 1,044,000,000.- (One billion forty-four million 00/100 Bolivianos) to finance the construction of the Railway Transport System in the Montero — Bulo Bulo section.

That paragraph II of Article 26 of Law No. 317 authorizes the Central Bank of Bolivia to grant to the Ministry of Economy and Public Finance, through the General Treasury of the Nation, an extraordinary credit under concessional conditions, for which the BCB is exempted from the application of Articles 22 and 23 of the BCB Law No. 1670 of October 31, 1995.

That by Board Resolution No. 041/2013, the Specific Regulation for the Granting of Credit provided for in Law No. 317 was approved.

That Law No. 396 modifies paragraphs III and IV, and incorporates Paragraphs V and VI to Article 26 of Law No. 317 of December 11, 2012, as follows:

III. The Ministry of Economy and Public Finance is authorized through the General Treasury of the Nation to issue and grant Non-Negotiable Treasury Bonds in favor of the Central Bank of Bolivia to guarantee the credit.

IV. The Ministry of Public Works, Services and Housing is responsible for the use and destination of the resources effectively transferred by the General Treasury of the Nation, as well as the execution, monitoring, and evaluation of the construction of the Railway Transport System in the Montero — Bulo Bulo section.

V. Within the framework of what is provided in Paragraph I of this Article, the Central Bank of Bolivia is authorized to expand the extraordinary credit referred to in Paragraph II of this Article, and the Ministry of Economy and Public Finance, through the General Treasury of the Nation, to contract an additional credit in national currency with the Central Bank of Bolivia, for an amount up to Bs 696,000,000.- (Six hundred ninety-six million 00/100 Bolivianos), making a total amount of Bs 1,740,000,000.- (One billion seven hundred forty million 00/100 Bolivianos), to finance the construction of the Railway Transport System in the Montero — Bulo Bulo section.

VI. The extraordinary credit contract signed within the framework of Paragraphs I, II, and V of this Article will be exempt from protocolization expenses and other expenses required for its formalization.

That the note MEFPNTCP/DGCP/UEPS-437/2013 from the Undersecretariat of Treasury and Public Credit, dependent on the Ministry of Economy and Public Finance, refers to the credit request authorized by Law 317 (PGE-2013).

That the Report from the Monetary Operations Management BCB-GOM-SOSP-INF-2013-6 recommends that for the granting of the credit to the Ministry of Economy and Public Finance outlined in Laws 317 and 396, the specific regulation be modified.

That the Report from the Legal Affairs Management BCB-GAL-SANO-INF-2013-317 states it has no observations on the modifications proposed by the Monetary Operations Management via report BCB-GOM-SOSP-INF-2013-6, considering that these arise from what is provided in Article 26 of Law No. 317 and Article 8 of Law No. 396, so that under the shelter of what is established by Law No. 1670 and the Statute of the BCB, it is established that it corresponds to the Board to consider the approval of the modification of the "Specific Regulation for the Granting of Credit provided for in Law No. 317" since it does not contravene the current legal framework, being the competence of the BCB Board to consider its approval by two-thirds of the votes of all its members in accordance with what is established in letters a) and o) of Article 54 of Law No. 1670 and Article 24 of the Institution's Statute.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve the modification of Article 1 of the Specific Regulation for the Granting of Credit provided for in Law No. 317 in the following terms:

SAYS:

Article 1.- (Object) This Regulation aims to regulate the granting of the credit provided for in Law No. 317 Article 26 for the "Construction of the Railway Transport System in the Montero — Bulo Bulo Section", by the Central Bank of Bolivia (BCB) in favor of the Ministry of Economy and Public Finance (MEFP).

SHOULD SAY:

"Article 1.- (Object) This Regulation aims to regulate the granting of the credit of the Central Bank of Bolivia (BCB) in favor of the Ministry of Economy and Public Finance (MEFP), provided for in Article 26 of Law No. 317 modified by Article 8 of Law No. 396, for the 'Construction of the Railway Transport System in the Montero — Bulo Bulo Section'."

Article 2.- Approve the modification of Article 3 of the Specific Regulation for the Granting of Credit provided for in Law No. 317 in the following terms:

SAYS:

Article 3.- (Acceptable Guarantees) Guarantees may be constituted by Non-Negotiable Treasury Bonds in favor of the BCB or by the authorization of unconditional and irrevocable automatic debit from MEFP accounts at the BCB.

SHOULD SAY:

"Article 3.- (Guarantees) The guarantees will be constituted by Non-Negotiable Treasury Bonds issued by the General Treasury of the Nation, in favor of the Central Bank of Bolivia."

Article 3.- Approve the modification of Article 7 of the Specific Regulation for the Granting of Credit provided for in Law No. 317 in the following terms:

SAYS:

Article 7.- (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 Governorship. The protocolization procedures of the Contract will be carried out by the BCB and the expenses required for these procedures will be covered by the MEFP.

SHOULD SAY:

"Article 7.- (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 Governorship. The protocolization procedures of the Contract will be exempt from protocolization expenses and other expenses required for its formalization."

Article 4.- Approve the modification of Article 8 of the Specific Regulation for the Granting of Credit provided for in Law No. 317 in the following terms:

SAYS:

Article 8.- (Use, Evaluation, and Monitoring) The use, evaluation, and monitoring of the resources of the credit granted are the exclusive responsibility of the Ministry of Public Works, Services and Housing (MOPSV), as stated in Law No. 317 in Article 26 paragraph IV.

The MOPSV must send a copy of the transmittal note of the evaluation and monitoring reports to the BCB on a semi-annual basis.

SHOULD SAY:

"Article 8.- (Use, Evaluation, and Monitoring) The Ministry of Public Works, Services and Housing is responsible for the use and destination of the resources effectively transferred by the General Treasury of the Nation, as well as for the execution, monitoring, and evaluation of the construction of the Railway Transport System in the Montero — Bulo Bulo section. The MOPSV must send a copy of the transmittal note of the evaluation and monitoring reports to the BCB on a semi-annual basis."

Article 5.- The approved modifications will enter into force from the date of their approval.

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

La Paz, September 17, 2013

ANNEX

SPECIFIC REGULATION FOR THE GRANTING OF CREDIT TO THE MEFP PROJECT: CONSTRUCTION OF THE RAILWAY TRANSPORT SYSTEM IN THE MONTERO-BULO BULO SECTION

CHAPTER I PRELIMINARY PROVISIONS

Article 1.- (Object) This Regulation aims to regulate the granting of the credit of the Central Bank of Bolivia (BCB) in favor of the Ministry of Economy and Public Finance (MEFP), provided for in Article 26 of Law No. 317 modified by Article 8 of Law No. 396, for the "Construction of the Railway Transport System in the Montero — Bulo Bulo Section".

CHAPTER II CREDIT APPLICATION

Article 2.- (Credit Application) To grant the credit, the MEFP must submit the following documentation:

1. Written request addressed to the President of the BCB and signed by the Minister of Economy and Public Finance, which must contain: a) Requested amount, b) Proposal for term and form of payment of principal and interest, c) Proposal for disbursement schedule and payment plan, d) Guarantees offered.

2. Legalized Presidential Decree of the appointment of the Minister of Economy and Public Finance.

3. Specific Ministerial Resolution that determines the Concessional nature for this credit.

Article 3.- (Guarantees) The guarantees will be constituted by Non-Negotiable Treasury Bonds issued by the General Treasury of the Nation, in favor of the Central Bank of Bolivia.

Article 4.- (Reports for Approval)

Upon receipt of the application and documentation established in Article 2, prior to Board consideration, the President of the BCB will request the following reports: a) Technical report on financial conditions to the Monetary Operations Management (GOM). b) Legal report from the Legal Affairs Management (GAL), regarding compliance with regulations and submission of documentation required for the granting of the credit. c) Other reports that may be required.

Article 5.- (Approval of Credit Application) The BCB Board of Directors will consider the technical, legal, and other reports and, if applicable, approve the credit by the favorable vote of two-thirds of its members present at the Board meeting, issuing the corresponding Resolution. Likewise, it will instruct the preparation and subsequent signing of the contract by the President of the BCB, prior to review and approval by the Board.

CHAPTER III CREDIT CONTRACT

Article 6.- (Financial Conditions) The financial conditions of the credit will be established and determined by the BCB Board of Directors, taking into account the MEFP's request and the degree of concessional nature established by the MEFP through Ministerial Resolution.

Article 7.- (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 Governorship. The protocolization procedures of the Contract will be exempt from protocolization expenses and other expenses required for its formalization.

Article 8.- (Use, Evaluation, and Monitoring) The Ministry of Public Works, Services and Housing is responsible for the use and destination of the resources effectively transferred by the General Treasury of the Nation, as well as for the execution, monitoring, and evaluation of the construction of the Railway Transport System in the Montero — Bulo Bulo section.

The MOPSV must send a copy of the transmittal note of the evaluation and monitoring reports to the BCB on a semi-annual basis.

Article 9.- (Conditions for Disbursements) The disbursements of the resources of the public credit granted will be made only when there is: a) The BCB Board Resolution that approves the granting of the Credit and the Public Credit Contract. b) A specific account enabled at the BCB in Bolivianos or a Specific Ledger in the Single Treasury Account (CUT) in Bolivianos. c) In case the MEFP makes modifications to the disbursement schedule, it must communicate the same to the BCB.

Article 10.- (Registration and Accreditation of Credit Resources) The Ministry of Public Works, Services and Housing is responsible for the registration and accreditation of the resources of the credit to be granted by the BCB in favor of the MEFP.