Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 194/2015

SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES CONCESSIONAL EXTRAORDINARY CREDIT TO THE NATIONAL ELECTRIC COMPANY (ENDE) FOR Bs3,223,527,473.

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.

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

Ministerial Resolution (R.M.) of the Ministry of Hydrocarbons and Energy (MHE) No. 204-15 of September 30, 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 – Managements 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.

Board Resolution of ENDE No. 027/2015 of September 1, 2015.

Note from the MHE CITE: MHE-07696 DGAJ-00084, received on September 30, 2015.

Note from ENDE CITE: ENDE-PREJ-9/32-15, received on September 30, 2015.

Notes from ENDE CITE: ENDE-PREJ-9/30, 33 and 34 – 15, all dated September 29, 2015.

Note from ENDE CITE: ENDE-PREJ-10/46-15, received on October 14, 2015.

Note from ENDE CITE: ENDE-PREJ-10/47-15, received on October 15, 2015.

Report from the Monetary Operations Management (GOM) CITE: BCB-GOM-SOSP-DCE-INF-2015-23 of October 9, 2015.

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Report from the Legal Affairs Management (GAL) CITE: BCB-GAL-SANO-INF-2015-430 of October 9, 2015.

CONSIDERING:

That the Political Constitution of the State (CPE), approved by Referendum on January 25, 2009 and promulgated on February 7, 2009, in numeral 6 of its Article 9, establishes that it is the end 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 numeral 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 the principal 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 Thousand Six Hundred Sixty-Two Million 00/100 Bolivianos) in favor of ENDE, on concessional conditions, with the object 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, Numeral 10 and Article 322 of the CPE, ENDE is authorized to contract the aforementioned credit with the BCB.

That according to numeral 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 numeral 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 numeral 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.

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That according to numeral VI, the MHE, through Ministerial Resolution, 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 cash flows will be used for the payment of the credit indicated in the Article.

That the Ministerial Resolution 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 exceptionally access internal credits of the Central Bank of Bolivia.

That the Ministerial Resolution of the MHE No. 204-15 justifies before the BCB and resolves among other things: 1) Determine that according to the PGE 2015 Law, Law No. 614, the Project "Combined Cycles Entre Ríos Thermoelectric Plant", which will be executed by ENDE Corporation, will be financed with a credit of Bs3,223,527,473.- (Three Thousand Two Hundred Twenty-Three Million Five Hundred Twenty-Seven Thousand Four Hundred Seventy-Three 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. 00112/2015, 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. 00383/2015, 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 cash 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 before 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 Managements 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 EPNE.

That through R.D. No. 027/2015, 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 "Combined Cycles Entre Ríos Thermoelectric Plant".

That through notes CITE: ENDE-PREJ-9/30, 33 and 34-15, ENDE puts on knowledge

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of the Ministry of Development Planning, MEFP and MHE, respectively, a copy of the Board Resolution of ENDE No. 027/2015 of September 1, 2015.

That through note CITE: MHE-07696 DGAJ-00084, the MHE sends the Ministerial Resolution No. 204-15 of September 30, 2015, which has the object "To Determine that according to Law No. 614 of the General State Budget Management 2015 of December 13, 2014, the Project "Combined Cycles Entre Ríos Thermoelectric Plant" which will be executed by ENDE Corporation, with the financing of a credit of Bs3,223,527,473.- (Three Thousand Two Hundred Twenty-Three Million Five Hundred Twenty-Seven Thousand Four Hundred Seventy-Three 00/100 Bolivianos), to be requested from the Central Bank of Bolivia.

That through note CITE: ENDE-PREJ-9/32-15, ENDE requests from the BCB the granting of a concessional extraordinary credit for Bs3,223,527,473.- (Three Thousand Two Hundred Twenty-Three Million Five Hundred Twenty-Seven Thousand Four Hundred Seventy-Three 00/100 Bolivianos) to finance the Project: "Combined Cycles Entre Ríos 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 – Managements 2010, 2011, 2012, 2013, 2014 and 2015.

That through note CITE: ENDE-PREJ-10/46-15, ENDE states that it has no observations to the conditions of the concessional credit approved by the Board of Directors of the BCB, which will be put before the Board of Directors of ENDE.

That through note CITE: ENDE-PREJ-10/47-15, ENDE makes known that the conditions of the credit have been approved by the Board of Directors of ENDE.

That the Monetary Operations Management recommends in its report CITE: BCB-GOM-SOSP-DCE-INF-2015-23, 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-2015-430 that the request made by ENDE falls within what is provided for by current regulations, to 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 Public Enterprises in the Framework of the General State Budget – Managements 2010, 2011, 2012, 2013, 2014 and 2015 and recommends putting before the Board of Directors the credit approval request presented by ENDE.

That Article 6 of the Regulations for the Approval of Credit to National Strategic Public Enterprises in the Framework of the PGE – Managements 2010, 2011, 2012, 2013, 2014 and 2015 establishes that the Board of Directors of the BCB, in consideration of the technical and

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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 of Directors 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.

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 of the General State Budget – Management 2015 (PGE – 2015), of the antecedents and provisions described above, the granting of a concessional extraordinary credit in favor of ENDE to finance the Project "Combined Cycles Entre Ríos Thermoelectric Plant", under the following terms and conditions:

Concept	Detail
Currency:	Bolivianos.
Total Credit Amount:	Bs3,223,527,473.- (Three Thousand Two Hundred Twenty-Three Million Five Hundred Twenty-Seven Thousand Four Hundred Seventy-Three 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:	May 31, 2018.
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 19, 2015

Marcelo Zabalaga Estrada

Central Bank of Bolivia
Board of Directors

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Alvaro Rodríguez Rojas
Ronald Polo Rivero
Sergio Velarde Vera