Board Resolution No. 201/2012

BOARD RESOLUTION NO. 201/2012

SUBJECT: MONETARY OPERATIONS MANAGEMENT — APPROVES THE APPLICATION FOR A CONCESSIONAL EXTRAORDINARY CREDIT TO THE NATIONAL ELECTRIC COMPANY FOR AN AMOUNT OF Bs 1,044,000,000 FOR THE "SAN JOSE HYDROELECTRIC PROJECT, TRANSMISSION LINES AND ASSOCIATED SUBSTATIONS"

SEEING:

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. 062 of November 28, 2010, approving the 2011 General State Budget (PGE).

Law No. 211 of December 23, 2011, approving the 2012 General State Budget (PGE).

Law No. 291 of September 22, 2012, modifying the 2012 General State Budget (PGE).

The Regulation for the Granting of Credit to National Strategic Public Enterprises within the framework of the General State Budget for the fiscal years 2010, 2011, and 2012, approved by BCB Board Resolution No. 23/2011 of February 22, 2011, and its subsequent modifications.

Ministerial Resolution No. 532 of August 16, 2012, from the Ministry of Economy and Public Finance.

The note from the Undersecretariat of Treasury and Public Credit, dependent on the Ministry of Economy and Public Finance (MEFP/NTCP/DGAFT/USCFT/N°1616/12) of August 22, 2012.

Supreme Decree No. 29644 of July 16, 2008.

Supreme Decree No. 267 of August 26, 2009.

Supreme Resolution No. 07124 of March 7, 2012.

The Technical Report of the National Electric Company ENDE-IT-GGR-11/1-12 of November 7, 2012.

The Financial Report of the National Electric Company ENDE-IF-DFI-11/1-12 of November 6, 2012.

The Legal Report of the National Electric Company INF.DIR. 16-2012 of November 6, 2012.

Ministerial Resolution No. 335-12 of November 14, 2012, from the Ministry of Hydrocarbons and Energy.

The credit application note from the National Electric Company ENDE-GGN-11/16-12 dated November 19, 2012.

The Report from the Economic Policy Advisory BCB-APEC-SSMF-INF-2012-34 of November 23, 2012.

The Report from the Monetary Operations Management BCB-GOM-SOSP-INF-2012-18 of November 22, 2012.

The Report from the Legal Affairs Management BCB-GAL-SANO-INF-2012-372 of November 23, 2012.

CONSIDERING:

That the Political Constitution of the State (CPE), approved by referendum on January 25, 2009, and promulgated on February 7, 2009, establishes in Article 158, paragraph I, numeral 10, that the Plurinational Legislative Assembly has the attribute to approve the contracting of loans that commit the general revenues of the State.

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 when 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 paragraph II of Articles 20 and 379 of the Political Constitution of the State establishes that it is the responsibility of the State, at all levels of government, to guarantee the generation of electric energy for domestic consumption in the Country.

That Articles 22 and 23 of Law No. 1670 determine that the CENTRAL BANK OF BOLIVIA (BCB) cannot grant credits to the Public Sector or incur contingent liabilities in its favor, except in favor of the General Treasury of the Nation (TGN) to attend to urgent needs derived from declared public calamities, internal or international commotion via Supreme Decree, and to attend to temporary liquidity needs, within the limits of the monetary program; these operations will be documented in all cases through negotiable public debt securities issued by the National Treasury.

That Article 27 of Law No. 211 of December 23, 2011, extends during the 2012 Fiscal Year the validity of Article 8 of Law No. 50, modified by Article 13 of Law No. 62, respectively, regarding the resources of the credit authorized in favor of the National Electric Company (ENDE), which had not been committed by December 31, 2011.

That Article 12 of Law No. 291 of September 22, 2012, authorizes the Central Bank of Bolivia to grant an extraordinary credit of up to Bs 2,088,000,000.- (TWO MILLION EIGHT HUNDRED EIGHTY THOUSAND BOLIVIANOS) in favor of the National Electric Company (ENDE), in addition to what is established in Article 27 of Law No. 211 of December 23, 2011, under concessional conditions, with the objective of financing the San Jose de Cochabamba Hydroelectric Projects for an amount of Bs 1,044,000,000.- (ONE THOUSAND FORTY-FOUR MILLION BOLIVIANOS); and for the Warnes Thermoelectric plant for Bs 1,044,000,000.- (ONE THOUSAND FORTY-FOUR MILLION BOLIVIANOS). For this purpose, the Central Bank of Bolivia - BCB is exempted from the application of Articles 22 and 23 of Law No. 1670 of October 31, 1995.

That in paragraph V of the aforementioned Law, the Ministry of Economy and Public Finance (MEFP), through the General Treasury of the Nation (TGN), is authorized to issue and grant Non-Negotiable Treasury Bonds in favor of the Central Bank of Bolivia (BCB), to guarantee the amount of the credit granted by said entity in favor of the National Electric Company (ENDE) upon written request from the Ministry of Hydrocarbons and Energy, and jointly with the Central Bank of Bolivia (BCB).

That in paragraph VI of Law No. 291, the National Electric Company (ENDE) is exempted from the effects and scope of the application of Articles 33 and 35 of Law No. 2042 of December 21, 1999, on Budgetary Administration.

That the note from the Undersecretariat of Treasury and Public Credit, dependent on the Ministry of Economy and Public Finance (MEFP/NTCP/DGAFT/USCFT/N°1616/12), forwards to the Central Bank of Bolivia (BCB) Ministerial Resolution No. 532 of August 16, 2012, which establishes the methodology for calculating the 20% concessionality degree for the 2012 management.

That Supreme Decree No. 29644 of July 16, 2008, aims to establish the legal nature of ENDE as a national strategic and corporate public enterprise.

That Supreme Decree No. 267 of August 26, 2009, modifies Article 4 of Supreme Decree No. 29644 and approves the Statutes of ENDE.

That by Supreme Resolution No. 07124 of March 7, 2012, Mr. Hugo Villarroel Senzano was appointed as Interim General Manager of ENDE.

That through the note from the National Electric Company (ENDE-GGN-11/16-12) dated November 19, 2012, ENDE requests the Central Bank of Bolivia (BCB) to grant the extraordinary credit under concessional conditions.

That Ministerial Resolution No. 335-12 of November 14, 2012, from the Ministry of Hydrocarbons and Energy, justifies the following aspects before the BCB:

1. It determines that, in accordance with Law No. 291, the National Development Plan, and the Optimal Expansion Plan of the SIN 2012-2022, the execution of the San Jose Hydroelectric Project, Transmission Lines, and Associated Substations is of national priority and will be executed by the Electric Company Corani S.A. — CORANI S.A., through the capital contribution made by ENDE, for which it will request a credit of Bs 1,044,000,000.- from the BCB; the amount will be destined to the referred project, and future flows, expressed in the profits received by ENDE from its participation in CORANI S.A. and its other subsidiaries, will be used to pay the credit;

2. It confirms the technical feasibility of executing the San Jose Hydroelectric Project, Transmission Lines, and Associated Substations, as stated in Report MHE-VMEEA-DGE No. 100/2012 issued by the Undersecretariat of Electricity and Alternative Energies — VMMA of the MHE;

3. It determines that, according to the economic and financial evaluation of the San Jose Hydroelectric Project, Transmission Lines, and Associated Substations, contained in Report DGAA No. 553/2012, issued by the General Directorate of Administrative Affairs, the payment capacity of the credit to be contracted with the BCB is ensured. Without prejudice to the above and additionally, it is determined that the available profits generated by ENDE's subsidiary companies will be employed to pay the debt that said company incurs with the BCB for the execution of the referred project;

4. To provide, within the framework of what is established in this Resolution, that this Ministry will authorize the disbursement requests that ENDE makes to the BCB, based on an evaluation and monitoring report issued for each disbursement. This Ministry commits, through the VMEEA, to carry out the evaluation and monitoring of the execution of the Credit resources. To provide that ENDE, CORANI S.A., and the MHE, prior to the authorization of any disbursement of the credit resources to be contracted with the BCB, will modify the agreement they signed with the aim of establishing the technical, administrative, and financial conditions necessary to operationalize the monitoring that the VMEEA will carry out on the execution of the referred project, which CORANI S.A. in coordination with ENDE will carry out with the resources of the capital contribution to be made.

That ENDE Board Resolution No. 018/2012 approves the Investment Plan and the Disbursement Schedule of the credit resources to be granted by the BCB, with a breakdown of expenditure in national and foreign currency.

That the report from the Economic Policy Advisory BCB-APEC-SSMF-INF-2012-34 establishes, with respect to the impact on the 2012 Monetary Program of the credit requested by ENDE for the "San Jose Hydroelectric Project — Transmission Lines and Associated Substations," that, except for extraordinary operations that may imply pronounced increases in Net Internal Credit (CIN), the disbursement of Bs 106,907,061 that could be effected in the remainder of the fourth quarter of 2012 will not affect the fulfillment of the measurable targets in said Program, due to the fact that the Non-Financial Public Sector (SPNF) accumulated significant margins during the year.

That the Report from the Monetary Operations Management BCB-GOM-SOSP-INF-2012-18 of November 22, 2012, considers the financial conditions for granting the concessional extraordinary credit to the National Electric Company (ENDE) for the execution of the San Jose Hydroelectric Project, Transmission Lines, and Associated Substations.

That the Report from the Legal Affairs Management BCB-GAL-SANO-INF-2012-372 establishes that the request made by ENDE has complied with the submission of the required documents, with no legal impediment to the approval of the extraordinary credit under concessional conditions to the National Electric Company (ENDE) for the execution of the San Jose Hydroelectric Project, Transmission Lines, and Associated Substations.

That in virtue of what is provided in Article 44 of Law No. 1670, the Board of Directors of the BCB is the competent instance to authorize the granting of the extraordinary credit in favor of ENDE in order to comply with what is expressly disposed in the PGE-2010, 2011, and 2012 and applicable legal provisions.

THEREFORE,

THE BOARD OF DIRECTORS OF THE CENTRAL BANK OF BOLIVIA

RESOLVES:

Article 1.- Approve, within the framework of Article 12 of Law No. 291 of September 22, 2012, the granting of a concessional extraordinary credit to the National Electric Company (ENDE), for the execution of the San Jose Hydroelectric Project, Transmission Lines, and Associated Substations, under the following terms and conditions:

Currency: Bolivianos.

Total Credit Amount: Bs 1,044,000,000.- (One thousand forty-four million 00/100 Bolivianos).

Term: Thirty (30) years.

Grace Period: Five (5) years on principal, with interest payable from the first disbursement.

Annual Interest Rate: 1.24% (One point twenty-four percent) as established by Ministerial Resolution No. 532 of the Ministry of Economy and Public Finance of August 16, 2012.

Disbursement Deadline: Until June 30, 2016.

Payment Plan: Annual.

Article 2.- Authorize the President of the BCB to sign the contract with the National Electric Company under the terms of this Resolution.

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

La Paz, November 27, 2012