Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 189/2015

SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES CONCESSIONAL EXTRAORDINARY CREDIT TO THE NATIONAL ELECTRIC COMPANY (ENDE) FOR Bs315,553,226.-

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 (GBE-2015) of December 13, 2014.
• The Ministerial Resolution (R.M.) of the Ministry of Economy and Public Finances (MEFP) No. 028 of January 21, 2015.
• The Ministerial Resolution (R.M.) of the Ministry of Hydrocarbons and Energy (MHE) No. 195-15 of September 23, 2015.
• The 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 State-Owned Enterprises within the framework of the General State Budget – Management 2010 and 2011; modified through 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 dated 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.
• The Board Resolution of ENDE No. 19/2015 of May 26, 2015.
• The Note from the MHE CITE: MHE-07438 DGAJ-00079, received on September 23, 2015.
• The Note from ENDE CITE: ENDE-PREJ-9/18-15, received on September 23, 2015.
• The Note from ENDE CITE: ENDE-PREJ-9/15, 17 and 16 – 15, of September 23, 2015.
• The Note from ENDE CITE: ENDE-PREJ-10/41-15, received on October 7, 2015.
• The Note from the Executive Presidency of ENDE CITE: ENDE-DGFN-10/23-15 of October 12, 2015.
• The Report from the Monetary Operations Management (GOM) CITE: BCB-GOM-SOSP-DCE-INF-2015-18 of September 30, 2015.
• The Report from the Legal Affairs Management (GAL) CITE: BCB-GAL-SANO-INF-2015-410 of October 2, 2015.

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//2. R.D. No. 189/2015

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 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 the 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 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, in its Article 19, Paragraph I, authorizes the BCB to grant an extraordinary credit of up to Bs11,662,000,000.- (Eleven Billion Six Hundred Sixty-Two Million 00/100 Bolivianos) in favor of ENDE, under concessional conditions, with the objective of financing investment projects for generation and transmission in the electricity sector oriented towards 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 aforementioned Article and 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 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.

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

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//3. R.D. No. 189/2015

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 State-Owned Enterprises that exceptionally access internal credits from the Central Bank of Bolivia.

That the R.M. of the MHE No. 195-15 justifies before the BCB and resolves among other things: 1) Determine that according to the 2015 GBE Law, the Project “La Bélgica – Los Troncos Transmission Line”, which will be executed by ENDE Corporation, will be financed with a credit of Bs315,553,226.- (Three Hundred Fifteen Million Five Hundred Fifty-Three Thousand Two Hundred Twenty-Six 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 Reports MHE-VMEEA-DGEA-UDIER No. 00006/2015 and MHE-VMEEA-DGEA-UDIER-No. 00012/2015 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. 0278/2015 ratified through internal note DGAA-0502/2015, 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 State-Owned Enterprises within the framework of the General State Budget Management 2010 and 2011, approved through Board Resolution of the BCB No. 023/11 and modified through 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, has the object of regulating the granting of credits by the BCB in favor of the ESSE.

That through R.D. No. 19/2015, the Board of Directors of ENDE approves the Investment Plan and the Disbursement Schedule of the resources of the credit to be granted by the BCB, for the execution of the Project “La Bélgica – Los Troncos Transmission Line”.

That through notes CITE: ENDE-PREJ-9/15, 17 and 16-15, ENDE informs the MHE, MEFP and Ministry of Development Planning, respectively, of a copy of the Board Resolution of ENDE No. 019/2015 of May 26, 2015.

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//4. R.D. No. 189/2015

That through note CITE: MHE-07438 DGAJ-00079, the MHE transmits the Ministerial Resolutions No. 194-15, No. 195-15 and No. 196-15, which have the object “To Determine that according to the General State Budget Law 2015, Law No. 614 of December 13, 2014, the Projects “Warnes – Las Brechas Transmission Line, San José Santivañez and La Bélgica – Los Troncos” which will be executed by the National Electric Company – ENDE Corporation, with the financing of an individual credit for each project to be requested from the Central Bank of Bolivia.

That through note CITE: ENDE-PREJ-9/18-15, ENDE requests from the BCB the granting of a concessional extraordinary credit for Bs315,553,226.- (Three Hundred Fifteen Million Five Hundred Fifty-Three Thousand Two Hundred Twenty-Six 00/100 Bolivianos) to finance the Project: “La Bélgica – Los Troncos Transmission Line”, for this effect, it attaches the documentation established in the Regulations for the Approval of Credit to National Strategic State-Owned Enterprises within the framework of the General State Budget – Management 2010, 2011, 2012, 2013, 2014 and 2015.

That through note CITE: ENDE-PREJ-10/41-15, ENDE accepts the conditions of the credit approved by the Board of Directors of the BCB.

That through note CITE: ENDE-DGFN-10/23-15 the Executive Presidency of the National Electric Company communicates the acceptance by the Board of Directors of that company of the credit conditions for the La Bélgica – Los Troncos Transmission Line project.

That the Monetary Operations Management recommends in its report CITE: BCB-GOM-SOSP-DCE-INF-2015-18, 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-INF-2015-410 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 required in article 2 of the Regulations for the Approval of Credit to National Strategic State-Owned Enterprises in 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 State-Owned Enterprises in the Framework of the GBE – Management 2010, 2011, 2012, 2013, 2014 and 2015 establishes that the Board of Directors of the BCB, in consideration of the technical and legal reports, will consider the credit request and in its case approve it, through the favorable vote of two thirds of its members present at the Board meeting, issuing the corresponding Resolution; and will instruct the elaboration and subsequent signing of the contract by the President of the BCB, prior to review and approval by the Board of Directors.

# Central Bank of Bolivia
## Board of Directors

//5. R.D. No. 189/2015

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

**Article 1.-** Approve within the framework of what is provided in Article 19 of Law No. 614 of December 13, 2014 of the General State Budget – Management 2015 (GBE – 2015), of the antecedents and provisions described above, the granting of a concessional extraordinary credit in favor of ENDE, to finance the Project “La Bélgica – Los Troncos Transmission Line”, under the following terms and conditions:

| **Concept** | **Value/Description** |
|--------------|------------------------|
| **Currency:** | Bolivianos. |
| **Total Credit Amount:** | Bs315,553,226.- (Three Hundred Fifteen Million Five Hundred Fifty-Three Thousand Two Hundred Twenty-Six 00/100 Bolivianos). |
| **Term:** | 30 years from the first disbursement. |
| **Grace Period for Capital:** | 5 years. |
| **Interest Rate:** | 1.31% (one point thirty-one percent). |
| **Deadline for Disbursements:** | December 29, 2017. |
| **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 12, 2015

*Marcelo Zabalaga Estrada*

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//6. R.D. No. 189/2015

*Reynaldo Yujra Segales*
*Alvaro Rodriguez Rojas*
*Sergio Velarde Vera*
*Ronald Polo Rivero*