Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 146/2017

SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES CONCESSIONAL EXTRAORDINARY CREDIT TO THE NATIONAL ELECTRIC COMPANY (ENDE) FOR Bs195,608,596 – PROJECT “CONSTRUCTION OF EL DORADO WIND FARM”

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 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 Finance (MEFP) No. 578 of June 20, 2017.
• Ministerial Resolution (R.M.) of the Ministry of Energy (MEN) No. 110-17 of July 11, 2017.
• BCB Board Resolution 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 Enterprises within the framework of the General State Budget Laws.
• ENDE Board Resolution No. 005/2017 of May 30, 2017.
• ENDE CITE note: ENDE-DGFN-8/26-17, received on August 9, 2017.
• ENDE CITE notes: ENDE-DGFN-8/16-17, ENDE-DGFN-8/18-17 and ENDE-DGFN-8/19-17, all dated August 4, 2017.

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• ENDE CITE note: ENDE-DGFN-8/47-17, received on August 18, 2017.
• BCB CITE note: BCB-GOM-SOSP-DCE-CE-2017-136 dated August 22, 2017.
• ENDE CITE note: ENDE-DGFN-10/36-17, received on October 16, 2017.
• Report from the Monetary Operations Management (GOM) CITE: BCB-GOM-SOSP-DCE-INF-2017-108 dated August 18, 2017.
• Report from the Legal Affairs Management (GAL) CITE: BCB-GAL-SANO-DLBCI-INF-2017-206 dated August 21, 2017.

CONSIDERING:

That the Political Constitution of the State (CPE), promulgated on February 7, 2009, in numeral 6 of its Article 9, establishes that it is the goal 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. Likewise, in paragraph I numeral 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 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 Law No. 614 of the General State Budget Management 2015 of December 13, 2014, in its Article 12, provides that any authorization established by Law of the General State Budget, for the BCB to grant extraordinary credits, as well as the authorizations to the MEFP, for it 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 Law No. 769, in its Article 9, Paragraph I, 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) in favor of ENDE, on concessional conditions, 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 ENDE parent company, or by ENDE parent company associated with its affiliate and subsidiary companies. For

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this purpose, 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, Numeral 10 and Article 322 of the CPE, ENDE is authorized to contract the referred credit with the BCB.

That in numeral 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 lead sector Ministry and jointly with the BCB.

That in accordance with numeral IV of the mentioned article, the Ministry of Hydrocarbons and Energy is responsible for the evaluation and monitoring of the execution of the credit resources to be granted by the BCB in favor of ENDE.

That in accordance with numeral 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 numeral VI of the same article, the MHE current MEN through R.M. must justify before 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 flows will be used for the payment of the credit.

That Law No. 856 in its Third Final Provision, establishes that Article 12 of Law No. 614 of December 13, 2014, remains pending for application.

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.

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 first additional provision that for the purposes of the application of Supreme Decree No. 3058, the terms “energy” and/or “energy-related” will comprise the sectors of electrical energy, lithium, and nuclear energy, as applicable, and in its third additional 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 Enterprises that exceptionally access internal credits to be granted by the Central Bank of Bolivia, as applicants for internal public debt, the Degree of Concessionality of at least 20% from the date of publication of this Ministerial Resolution.

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That R.M. of the MEN No. 110-17 justifies before the BCB and resolves among other things: 1) To determine that in accordance with Law No. 769 of December 17, 2015, of the PGE of the public sector for Fiscal Management 2016, the Project “Construction of El Dorado Wind Farm” will be executed by ENDE, will be partially financed with a credit of $us28,104,683.33 (Twenty-Eight Million One Hundred Four Thousand Six Hundred Eighty-Three 33/100 American Dollars), equivalent to Bs195,608,596.00 (One Hundred Ninety-Five Million Six Hundred Eight Thousand Five Hundred Ninety-Six 00/100 Bolivianos), to be requested from the BCB, 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-6/14-17 of June 12, 2017 and Technical Report MEN17/06276 – VMEEA/DGEA No. 0021 of June 30, 2017. 3) To approve the economic-financial evaluation of the project contained in the financial report ENDE-IF-UMEN-6/3-17 of June 12, 2017, based on what was manifested by the Financial Report MEN 17 – DGAA – 07073 – UFIN No. 046/2017 of July 7, 2017; since it has been manifested that ENDE has the payment capacity for the credit and establishes that the use and destination of the resources of the credit to be contracted by ENDE are of national priority within the framework of the “Patriotic Agenda for the Bicentennial 2025” elevated to the rank of Law by 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 flows indicated in the preceding paragraph will be used for the payment of the credit to be granted by the BCB. 4) It is established that the MEN 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 Vice-ministry of Electricity and Alternative Energies – VMEEA will carry out the evaluation and monitoring of the physical and financial execution of the project, ENDE is obliged to send all the information and documentation that is 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 BCB Board Resolution No. 019/2016, aims to regulate the granting of credits by the BCB in favor of the SPNE.

That through B.R. No. 005/2017, the ENDE Board approves the Investment Plan and the Disbursement Schedule of the credit resources to be granted by the BCB, for the execution of the Project “Construction of El Dorado Wind Farm”.

That through CITE note: ENDE-DGFN-8/26-17, ENDE requests from the BCB the granting of a concessional extraordinary credit of Bs195,608,596.00 (One Hundred Ninety-Five Million Six Hundred Eight Thousand Five Hundred Ninety-Six 00/100 Bolivianos), to finance the Project “Construction of El Dorado Wind Farm”, for this purpose, it attaches the documentation established in the Regulations for the Approval of Credit to National Strategic Public Enterprises within the framework of the General State Budget.

That through CITE notes: ENDE-DGFN-8/16-17, ENDE-DGFN-8/18-17 and ENDE-

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DGFN-8/19-17, ENDE puts in knowledge of the MEN, Ministry of Development Planning and Ministry of Economy and Public Finance, respectively, a copy of the ENDE Board Resolution No. 005/2017 of May 30, 2017.

That through CITE note: ENDE-DGFN-8/47-17, ENDE sends complementary information to the credit request for the Project “Construction of El Dorado Wind Farm” with the objective of giving continuity to the credit request.

That through CITE note: BCB-GOM-SOSP-DCE-CE-2017-136, the BCB communicates to ENDE the conditions approved by the Board and requests its acceptance.

That through CITE note: ENDE-DGFN-10/36-17, 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-2017-108, 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-2017-206, that the request made by ENDE falls within what is provided for by the current regulations, therefore it is established that ENDE has complied with the presentation of the documentation provided for in Article 2 of the BCB Regulations for the Approval of Credits to National Strategic Public Enterprises in the Framework of the General State Budget, corresponding to the BCB Board the consideration of the referred credit request, by two-thirds of the votes of the members present in the meeting as provided in Article 8 of the cited Regulations.

That Article 8 of the Regulations of the Central Bank of Bolivia for the Approval of Credit to National Strategic Public Enterprises in the Framework of the General State Budget Laws, establishes that upon receiving the conformity of the SPNE on the financial considerations, the BCB Board will approve the granting of the credit through Resolution, 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) and Law No. 856 of the General State Budget – Management 2017 (PGE – 2017), of the antecedents and provisions

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described above, the granting of a concessional extraordinary credit in favor of ENDE, to finance the Project “Construction of El Dorado Wind Farm”, under the following terms and conditions:

Currency:	Bolivianos.
Total Credit Amount:	Bs195,608,596.- (One Hundred Ninety-Five Million Six Hundred Eight Thousand Five Hundred Ninety-Six 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).
Deadline for Disbursements:	October 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 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, October 17, 2017

Pablo Ramos Sánchez

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Ronald Polo Rivero Abraham Pérez Alandia Sergio Velarde Vera