Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 172/2015

SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES EXTRAORDINARY CONCESSIONAL CREDIT TO THE NATIONAL ELECTRICITY COMPANY (ENDE) FOR BS2,826,598,687.-

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 on the General State Budget – Management 2015 (PGE-2015) of December 13, 2014.

Ministerial Resolution (R.M.) of the Ministry of Economy and Public Finances (MEFP) No. 028 of January 21, 2015.

Ministerial Resolution (R.M.) of the Ministry of Hydrocarbons and Energy (MHE) No. 178-15 of August 28, 2015.

Board Resolution (R.D.) of the BCB No. 023/11 of February 22, 2011, which approves the Regulations for the Granting of Credit to National Strategic Public Enterprises within the framework of the General State Budget – Management 2010 and 2011; modified by R.D. No. 026/11, No. 027/11, No. 030/11, No. 097/11, No. 039/12, No. 064/12, No. 024/13, No. 144/13, No. 008/14, No. 040/14 and No. 039/15 of March 2, March 18, March 22 and August 9, 2011, March 23, May 29, 2012, March 12 and October 15, 2013, January 28 and April 29, 2014 and March 17, 2015, respectively.

Board Resolution of ENDE No. 17/2015 of May 26, 2015.

Note from the MHE CITE: MHE-06654 DGAJ-00070, received on September 1, 2015.

Note from ENDE CITE: ENDE-PREJ-9/4-15, received on September 1, 2015.

Notes from ENDE CITE: ENDE-PREJ-9/1, 2 and 3 – 15, all dated September 1, 2015.

Communication from the Central Bank of Bolivia BCB-GOM-SOSP-DCE-CE-2015-136 of September 8, 2015.

Board Resolution of ENDE No. 30/2015 of September 14, 2015.

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Note from ENDE CITE: ENDE-GDEE-9/24-15 of September 15, 2015.

Report from the Monetary Operations Management (GOM) CITE: BCB-GOM-SOSP-DCE-INF-2015-16 of September 4, 2015.

Report from the Legal Affairs Management (GAL) CITE: BCB-GAL-SANO-INF-2015-360 of September 7, 2015.

CONSIDERING:

That the Political Constitution of the State (CPE), approved by Referendum on January 25, 2009 and promulgated on February 7, 2009, in item 6 of 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 item 10 of paragraph I of Article 158 and Article 322, it establishes that the Plurinational Legislative Assembly has the attribute to approve the contracting of public debt.

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 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.

That Law No. 614, in its Article 19, Paragraph I, authorizes the BCB to grant an extraordinary credit of up to Bs11,662,000,000.- (Eleven Million Six Hundred Sixty-Two Million 00/100 Bolivianos) in favor of ENDE, on concessional conditions, with the objective of financing investment projects for generation and transmission in the electricity sector oriented to increasing energy export capacity, which will be executed by its Subsidiary or Affiliate Companies through capital contributions. For this effect, the BCB is exempted from the application of Articles 22 and 23 of Law No. 1670 of October 31, 1995.

That within the framework of Paragraph I of the mentioned Article and according to what is established by Article 158, Paragraph I, Item 10 and Article 322 of the CPE, ENDE is authorized to contract the aforementioned credit with the BCB.

That according to item III, the MHE 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 within the framework of item IV, 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 Article.

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That according to item V, the MEFP is authorized, through the General Treasury of the Nation (TGN), to issue and grant Non-Negotiable Treasury Bonds in favor of the BCB, to guarantee the amount of the credit granted by said entity in favor of ENDE upon written request of the lead ministry and jointly with the BCB.

That according to item VI, the MHE, 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 the flows will be used for the payment of the credit indicated in the Article.

That the R.M. of the MEFP No. 028 determines for the 2015 management, a value of at least 20%, as the degree of concessionality for Public Enterprises that access internal credits of the Central Bank of Bolivia in an extraordinary manner.

That the R.M. of the MHE No. 178-15, justifies before the BCB and resolves among other things: 1) Determine that according to the PGE 2015 Law, the Project "Combined Cycles Warnes Thermoelectric Plant", which will be executed by ENDE, will be financed with a credit of Bs2,826,598,687 (Two Thousand Eight Hundred Twenty-Six Million Five Hundred Ninety-Eight Thousand Six Hundred Eighty-Seven 00/100 Bolivianos), to be requested from the BCB, whose amount will be destined to the Project. 2) Confirm the technical feasibility of the execution of the Project, as stated in the Technical Report MHE-VMEEA-DGE No. 00086/2015 issued by the Vice Ministry of Electricity and Alternative Energies (VMEEA). 3) Determine that according to the economic and financial evaluation carried out through Report DGAA No. 0265/2015, issued by the General Directorate of Administrative Affairs of the MHE, the Project justifies and ensures the payment capacity of the credit to be contracted with 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 National Development Plan and the Patriotic Agenda of the Bicentennial 2025; and that the future flows of the project indicated in Paragraph I, will be used for the payment of the credit to be granted by the BCB. 4) It is ordered that the MHE will authorize the disbursement requests of ENDE Corporation to the BCB based on an evaluation and monitoring report issued for each disbursement, the MHE 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, through the VMEEA, for the corresponding evaluation and monitoring.

That the Regulations for the Approval of Credit to National Strategic Public Enterprises within the framework of the General State Budget Management 2010 and 2011, approved by Board Resolution of the BCB No. 023/11 and modified by Board Resolutions No. 026/11, No. 027/11, No. 030/11, No. 097/11, No. 039/12, No. 064/12, No. 024/13, No. 144/13, No. 008/14, No. 040/14 and No. 039/15, aims to regulate the granting of credits by the BCB in favor of the EPNE.

That through R.D. No. 17/2015, the Board of Directors of ENDE approves the Investment Plan and the

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Disbursement Schedule of the resources of the credit to be granted by the BCB, for the execution of the Project "Combined Cycles Warnes Thermoelectric Plant".

That through notes CITE: ENDE-PREJ-9/1, 2 and 3-15, ENDE informs the MHE, MEFP and Ministry of Development Planning, respectively, of a copy of the Board Resolution of ENDE No. 017/2015 of May 26, 2015.

That through note CITE: MHE-06654 DGAJ-00070, the MHE transmits the Ministerial Resolution No. 178-15 of August 28, 2015, which aims to "Determine that according to the General State Budget Law 2015, Law No. 614 of December 13, 2014, the Project "Combined Cycles Warnes Thermoelectric Plant" which will be executed by the National Electricity Company – ENDE Corporation.

That through note CITE: ENDE-PREJ-9/4-15, ENDE requests from the BCB the granting of an extraordinary concessional credit for Bs2,826,598,687.- (Two Thousand Eight Hundred Twenty-Six Million Five Hundred Ninety-Eight Thousand Six Hundred Eighty-Seven 00/100 Bolivianos) to finance the Project: "Combined Cycles Warnes Thermoelectric Plant", for this effect, 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 – Management 2010, 2011, 2012, 2013, 2014 and 2015.

That through communication BCB-GOM-SOSP-DCE-CE-2015-136 the Acting President of the Central Bank of Bolivia communicates to ENDE that the Board of Directors of the BCB in its ordinary session on Tuesday, September 8, 2015, approved the conditions of the credit in favor of that company for the project "Combined Cycles Warnes Thermoelectric Plant" and requests the acceptance of ENDE.

That the Board of Directors of ENDE through Resolution No. 30/2015 approves the conditions of the BCB credit for the execution of the Project "Combined Cycles Warnes Thermoelectric Plant".

That through note CITE: ENDE-GDEE-9/24-15, the Acting Executive President of the National Electricity Company states that he has no observations regarding the conditions of the Concessional Credit approved by the Board of Directors of the BCB.

That the Monetary Operations Management recommends in its report CITE: BCB-GOM-SOSP-DCE-INF-2015-16, consider the interest rate scenarios presented 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-INF-2015-360 that the request made by ENDE falls within what is provided for by the current regulations, for this effect it has complied with the presentation of the documents

# Central Bank of Bolivia
## Board of Directors

//5. R.D. No. 172/2015

required in Article 2 of the Regulations for the Approval of Credit to National Strategic Public Enterprises within the Framework of the General State Budget – Management 2010, 2011, 2012, 2013, 2014 and 2015 and recommends putting the credit request presented by ENDE before the Board of Directors.

That Article 6 of the Regulations for the Approval of Credit to National Strategic Public Enterprises within the Framework of the PGE – Management 2010, 2011, 2012, 2013, 2014 and 2015 establishes that the Board of Directors of the BCB, considering the technical and legal reports, will consider the credit request and, if appropriate, approve it, by the favorable vote of two thirds of its members present at the Board meeting, issuing the corresponding Resolution; and will instruct the preparation and subsequent signing of the contract by the President of the BCB, prior to review and approval by the Board of Directors.

## THEREFORE,

## THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

## RESOLVES:

### Article 1.- Approve within the framework of what is established in Article 19 of Law No. 614 of December 13, 2014 on the General State Budget – Management 2015 (PGE – 2015), of the antecedents and provisions described above, the granting of an extraordinary concessional credit in favor of ENDE, to finance the Project "Combined Cycles Warnes Thermoelectric Plant", under the following terms and conditions:

| **Concept** | **Detail** |
|--------------|-------------|
| **Currency:** | Bolivianos. |
| **Total Credit Amount:** | Bs2,826,598,687.- (Two Thousand Eight Hundred Twenty-Six Million Five Hundred Ninety-Eight Thousand Six Hundred Eighty-Seven 00/100 Bolivianos). |
| **Term:** | 30 years from the first disbursement. |
| **Grace Period on Principal:** | 5 years. |
| **Interest Rate:** | 1.31% (one point thirty-one percent). |
| **Deadline for Disbursements:** | December 31, 2019. |
| **Payment Plan:** | Annual. |
| **Guarantees:** | Non-Negotiable Treasury Bonds. |

//6. R.D. No. 172/2015

### 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, September 15, 2015

*Signatures:*
- Marcelo Zabalaga Estrada
- Reynaldo Yujra Segales
- Álvaro Rodríguez Rojas
- Abraham Pérez Alandia
- Ronald Polo Rivero
- Sergio Velarde Vera