Resolution 091/2004

BOARD RESOLUTION NO. 091/2004
SUBJECT: FINANCIAL ENTITIES MANAGEMENT – AUTHORIZES RETURN OF THE IDA 1925/BO (WORLD BANK) CREDIT LINE to the TGN, THROUGH TRANSFER OF ASSETS AND LIABILITIES.

SEEING:
The IDA-1925-BO Development Credit Agreement, signed on June 24, 1988, between the Republic of Bolivia, the Central Bank of Bolivia (BCB), and the International Development Association.
The BCB Board Resolution No. 171/88 of November 2, 1988, which approves modifications to the Regulation of the Refinancing Line for the Productive Sector.
Law No. 1670 of October 31, 1995, of the Central Bank of Bolivia.
The GEF Report No. 171/2004 of June 29, 2004, from the Financial Entities Management and the International Operations Management.
The Report from the Legal Affairs Management SANO No. 146/04 of June 29, 2004.

CONSIDERING:
That Law 1670 in its Article 29, subsections a) and f), provides that the BCB will exercise functions as Financial Agent of the Government and for this purpose is authorized to provide services related to the contracting of external credits and to carry out trust and administration operations.
That the aforementioned Law, in its Article 54, subsection a), establishes among the attributions of the Board, the power to adopt general decisions that may be necessary for the BCB to fulfill the functions, competencies, and powers assigned to it by this Law.
That the Development Credit Agreement No. 1925-BO provides in sections 2.01 and 2.09, respectively, that the International Development Association, as creditor, agrees to lend to the borrower, the Republic of Bolivia, as debtor, within the terms established or stipulated in the present development credit agreement, a total amount in various currencies equivalent to SDR 77,500,000, and that the Central Bank of Bolivia, as representative of the Borrower, constitutes itself as the Executing Agency of the credit program.

That the balance of the obligation indicated in the previous paragraph, as of June 30, 2004, amounts to SDR 67,688,742.32.
That the Financial Entities Management and International Operations Management in their Report No. 171/2004 recommend the return to the Ministry of Finance of Line 1925-BO, through the transfer of assets and liabilities.
That in the opinion of the Legal Affairs Management, there is no legal impediment to deliver Line 1925-BO to the Ministry of Finance through the transfer of assets and liabilities, and the Board must, in accordance with what is established by Article 54, subsection a) of Law No. 1670, authorize said transfer.

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

Article 1.- Authorize the Administration to register the restitution to the BCB of MVDOL 36,678,241.90, corresponding to the BCB's contribution to the IDA 1925/BO Line Program, debiting the available funds registered in said Line.

Article 2.- Authorize the Administration to return the IDA 1925-BO Line through the transfer to the Ministry of Finance of all assets and liabilities with balances as of June 30, 2004, according to the following:
Expressed in MVDOL
ASSET LIABILITY
FUNDS IN BCB 65,948,426.27
LOAN PORTFOLIO BM CONTRIBUTION 99,337,967.57
LOAN PORTFOLIO FONDESIF IDA 1925/BO 25,142,857.16 INTERESTS TO PAY 185,267.89 ACCOUNTS TO COLLECT COLLATERAL BONDS B 10,000,000.00 RESERVES 3,528,742.93 ACCRUED INTEREST 94,285.74 UNDISTRIBUTED PROFIT (1,866,409.22) TOTAL ASSET 101,185,569.17 TOTAL LIABILITY 101,185,569.17

Article 3.- The transfer will be carried out under the following conditions:
I. Asset Transfer:
AVAILABLE: through cash disbursement of $us 29,214,652.14 for deposit in account No. 0898 “TGN Transitional Account – Foreign Currency” and the disbursement of the equivalent in bolivianos of MVDOL 36,733,774.13, for deposit in account No. 0865 “TGN Transitional Account – National Currency.”

LOAN PORTFOLIO PLUS ACCRUED INTERESTS: Through delivery to the TGN or to the person designated by the TGN of the loan portfolio for MVDOL 25,142,857.16 plus accrued interests as of June 30, 2004 for MVDOL 94,285.74, in the state in which they are found, for a total amount of MVDOL 25,237,142.90 (Twenty-five Million Two Hundred Thirty-seven Thousand One Hundred Forty-two and 90/100 National Currency with Dollar Value Maintenance).

ACCOUNTS RECEIVABLE. Through the transfer of rights arising from accounts receivable collateral bonds series B MVDOL 10,000,000.00 (Ten Million 00/100 National Currency with Dollar Value Maintenance).

II. Transfer of liability and equity: Through the transfer of the entirety of the Liability for MVDOL 99,337,967.57 plus interest payable MVDOL 185,267.89, Reserves for Revaluation Surplus in Titles MVDOL 3,528,742.93 and Undistributed Results MVDOL (1,866,409.22). The TGN must assume before the financing organization all obligations, financial conditions, and other commitments corresponding in accordance with what is established in the respective loan agreement.

III. Payment by the Ministry of Finance with the available resources of the transitional account in foreign currency established in this article, of the total credit granted by the BCB for the amount of $us 29,075,241.68, corresponding to the balance of capital and accrued interests as of June 30, 2004, of the credit granted with own resources to FONDESIF and to the pending payment amount by FONDESIF for the concept of the administration commission established in the credit contract granted with resources from the IDA 1925/BO line, which reaches the sum of $us 139,410.46.

IV. The Ministry of Finance with the available resources of the transitional account in National Currency, established in this article, will make the partial prepayment to the BCB of Bs 92,931,491.11, equivalent to MVDOL 11,733,774.13, corresponding to the liquidity credit granted through Board Resolution No. 089/2004. This amount will be reduced from the Liquidity Credit Limit of Bs 1.325 billion, established in the Memorandum of Understanding of December 4, 2003, signed between the Central Bank of Bolivia and the Ministry of Finance and the Addendum of April 1, 2004.

Article 4.- As an accounting report, the BCB will send to the TGN the opinion of the external auditor on the financial statements of the BCB for the 2004 management, which incorporates the administration of the IDA 1925-BO line.

Article 5.- Authorize the President of the BCB to sign the respective credit line transfer contract with the Ministry of Finance, establishing that the BCB is released absolutely and definitively from all present and future obligations that might arise as a consequence of the signing of the contract signed with the International Financing Organization and with the Republic of Bolivia for the administration of the IDA 1925/BO program.

Article 6.- The Presidency and the General Management are in charge of the execution and compliance of this Resolution.

La Paz, June 29, 2004

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Juan Antonio Morales A.

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Juan Medinaceli V. Enrique Ackermann A.

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José Luis Evia V. Jaime Apt B.