Central Bank of Bolivia

Board of Directors

BOARD RESOLUTION NO. 195/2015

SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES EXCEPTIONAL LOAN UNDER LAW NO. 742 TO THE NATIONAL FUND FOR REGIONAL DEVELOPMENT (FNDR) FOR Bs3,180,000,000.-

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. 742 on Modifications to the General State Budget – Management 2015 (PGE-2015) of September 30, 2015.
Board Resolution (B.R.) of the BCB No. 191/2015 of October 13, 2015.
Note from the National Fund for Regional Development (FNDR) REF: DE-MAB-3258-CAR/15 of October 15, 2015.
Report from the Monetary Operations Management (GOM) REF: BCB-GOM-SOSP-DCE-INF-2015-24 of October 16, 2015.
Report from the Legal Affairs Management (GAL) REF: BCB-GAL-SANO-INF-2015-444 of October 19, 2015.

CONSIDERING:

That the Political Constitution of the State (CPE), approved by referendum on January 25, 2009, and promulgated on February 7, 2009, establishes in paragraph 4 of Article 316 that it is a function of the State to participate directly in the economy through the incentive and production of economic and social goods and services to promote economic and social equity, and to drive development, avoiding oligopolistic control of the economy. In paragraph 10 of Paragraph I of Article 158 and Article 322, it establishes that it is the attribution of the Plurinational Legislative Assembly to approve and guarantee the contracting of loans and 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.

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That Law No. 742, in its Article 9, Paragraph I, authorizes the Ministry of Development Planning to constitute a trust as settlor, with an initial amount of Bs3,180,000,000 (Three Thousand One Hundred Eighty Million 00/100 Bolivianos) with a source of external resources and exceptionally resources from the Central Bank of Bolivia, and that the resources exceptionally granted by the Central Bank of Bolivia will be restored preferentially by the trust, and the remaining balances must be transferred to the General Treasury of the Nation – TGN.

That under Paragraph IV, it exceptionally authorizes the BCB to grant a loan to the trust for an amount up to Bs3,180,000,000 (Three Thousand One Hundred Eighty Million 00/100 Bolivianos), with the guarantee of the trust. For this purpose, the trust, represented by its trustee, is authorized to enter into the referred credit with the BCB, exempting it from the effects and scope of what is provided in Law No. 2042 of December 21, 1999, on Budgetary Administration, and Articles 22 and 23 of Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia.

That according to Paragraph VI, the Trust Contract and the Loan Contract signed with the BCB are exempt from the payment of notarization expenses.

That through B.R. No. 191/2015, the BCB Board of Directors approves the Specific Regulation for the Granting of Credit provided for in Law No. 742.

That through note REF: DE-MAB-3258-CAR/15, the FNDR requests an exceptional loan from the BCB under the framework of Law No. 742, for an amount up to Bs3,180,000,000.- (Three Thousand One Hundred Eighty Million 00/100 Bolivianos), so that the Trustee, by virtue of the Constitution Contract of the Trust, grants credits to the Autonomous Departmental Governments to finance local counterparts of public investment projects concurrent with the Central Bank of the State that have external financing. To this effect, it sends the documentation established in the Specific Regulation approved with B.R. No. 191/2015.

That the Monetary Operations Management recommends in its report REF: BCB-GOM-SOSP-DCE-INF-2015-24, consider the analysis of Interest Rates (average and weighted average of credits granted to NEPEs), as well as the financial conditions proposed by the FNDR (term and form of payment of capital and interest) and in case the loan request is considered favorably, the FNDR must open the corresponding disbursement and payment accounts at the BCB through the MEFP.

That the Legal Affairs Management concludes in its report REF: BCB-GAL-SANO-INF-2015-444 that the request made by the FNDR in its capacity as Trustee of the Trust, to facilitate access to resources for Autonomous Departmental Governments to finance the counterparts of public investment projects concurrent with the central level of the state that have external financing, falls within the provisions of current regulations, to this effect it has complied with the presentation of the

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documents required in Article 2 of the Regulation for the Granting of the Loan under the framework of Law No. 742 on Modifications to the General State Budget Management 2015 and recommends submitting the loan approval request presented by the FNDR in its capacity as Trustee of the Trust to the Board of Directors for consideration.

That Article 5 of the Specific Regulation for the Granting of the Loan under the Framework of Law No. 742 establishes that the BCB Board of Directors will consider the technical, legal, and other reports and, if appropriate, approve the loan, with the favorable vote of at least two-thirds of its present members, issuing the corresponding Resolution. It will also instruct the preparation and authorize the signing of the loan contract by the President of the BCB, prior to review and approval of the contract model.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve, within the framework of what is provided in Paragraph IV of Article 9 of Law No. 742 of September 30, 2015 on Modifications to the General State Budget – Management 2015 (PGE – 2015), of the antecedents and provisions described above, the granting of an exceptional loan in favor of the FNDR, under the following terms and conditions:

Concept	Detail
Currency:	Bolivianos.
Total Credit Amount:	Bs3,180,000,000.- (Three Thousand One Hundred Eighty Million 00/100 Bolivianos).
Term:	7 years computable from the first disbursement.
Interest Rate:	1.00% (one percent).
Payment Plan:	During the first two years, partial payments of the loan with its interests will be made as payments are received from the Autonomous Departmental Governments. From the third year onwards, payments will be annual with fixed installments.
Amortization:	Constant.
Interest Payment:	Annual.
Guarantees:	Trust.

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Article 2.- Authorize the President of the BCB to sign the contract with the National Fund for Regional Development (FNDR) under the terms of this Resolution.

Article 3.- The Presidency and General Management are responsible for the execution and compliance of this Resolution.

La Paz, October 19, 2015

Signatures:

Marcelo Zabalaga Estrada
Álvaro Rodríguez Rojas
Ronald Polo Rivero
Sergio Velarde Vera

Board Resolution No. 195/2015