Resolution 142/2010

BOARD RESOLUTION NO. 142/2010
SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES CONCESSIONAL EXTRAORDINARY CREDIT TO THE NATIONAL ELECTRIC COMPANY FOR AN AMOUNT OF Bs32,523,750.90

SEEN:
The Political Constitution of the State promulgated on February 7, 2009. Budgetary Administration Law No. 2042 of December 21, 1999. Law No. 1670 of the Central Bank of Bolivia (BCB) of October 31, 1995. The General State Budget for the 2010 management period (PGE-2010). Law No. 050 of October 9, 2010 on Modifications to the PGE – 2010. Law No. 062 of November 28, 2010 approving the General State Budget for the 2011 management period (PGE – 2011). The National Development Plan approved by Supreme Decree No. 29272 of September 12, 2007. Board Resolution of the National Electric Company No. 010/2010 of November 13, 2010. Resolution of the Ministry of Hydrocarbons and Energy No. 482-10 of December 13, 2010. The note from the National Electric Company CBGAF – 11330/10 of December 16, 2010. The Report from the Economic Policy Advisory BCB-APEC-SSMF-INF-2010-34 of December 21, 2010. The Report from the Monetary Operations Management BCB-GOM–SOSP–DCE-INF-2010- 8 of December 21, 2010.

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The Report from the Legal Affairs Management BCB-GAL-SANO-2010-429 of December 21, 2010.

CONSIDERING:
That the General State Budget (PGN)-2010 approved as established by article 158 numeral 11 of the Political Constitution of the State, in its article 41 establishes that: “The Central Bank of Bolivia is authorized to grant an extraordinary credit up to the equivalent of $US1,000,000,000.- (One Billion 00/100 United States Dollars), in favor of Strategic National Public Companies under concessional conditions, with the exclusive object of financing productive investment projects within the framework of the country's food and energy security; for this effect, the Central Bank of Bolivia is exempted from the application of articles 22 and 23 of Law No. 1670 of October 31, 1995” regarding the prohibition of granting credits to the Public Sector and the need to document through negotiable debt securities issued by the TGN, respectively.

That Law No. 050 in its article 8 establishes that within the framework of article 41 of the PGE – 2010, the BCB is authorized to grant ENDE an extraordinary credit of up to Bs5,715,400,000.- under concessional conditions with the object of financing productive investment projects and/or making capital contributions to its subsidiary companies, for which the Central Bank of Bolivia is exempted from the application of articles 22 and 23 of Law No. 1670 of October 31, 1995. Likewise, in its article 19 it determines to release ENDE from the application of articles 33 and 35 of Law No. 2042 on Budgetary Administration.

That Law No. 062 in its article 13 establishes that within the framework of article 41 of the PGE- 2010, the BCB is authorized to grant ENDE an extraordinary credit of up to Bs4,879,000,000.- with the object of financing productive investment projects and/or making capital contributions to its subsidiary companies.

That Ministerial Resolution No. 482-10 of the Ministry of Hydrocarbons and Energy, resolves: 1) That the use of Bs32,523,750.90 of the extraordinary credit to be contracted by ENDE with the BCB will be destined to the Electricity Supply Project for the Huanuni Mining Center, since the mentioned project is of national priority within the framework of the NDP; 2) That the future flows generated by the Electricity Supply Project for the Huanuni Mining Center, less operating costs, will be employed for the payment of the debt that ENDE incurs with the BCB; 3) That ENDE in coordination with the Vice Ministry of Electricity and Alternative Energies, within the framework of article 8 of Law No. 050 are in charge of continuing the procedures to finalize the credit before the BCB, to complement the documentation that said entity requires.

That the National Electric Company through letter CBGGN-11443/10 requests and justifies a credit of Bs32,523,750.90.

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That the Economic Policy Advisory (APEC) in its Report BCB-APEC-SSMF-INF- 2010, at the time of carrying out an evaluation on the impact of the credit on the Monetary Program, establishes that the credit requested by ENDE will not affect the fulfillment of the variables subject to measurement in said Program, due to the fact that it is less than the amount foreseen in the Program and taking into account that the General Government Sector accumulated important margins in what has passed of the year, and recommends that the credit and balances to be disbursed be included in the Monetary Program of 2011.

That the Monetary Operations Management points out in its BCB-GOM–SOSP–DCE-INF- 2010-8 that the financial conditions to be established must respect the concessional nature of the credit within the framework of current regulations, in addition to ensuring the recovery of the credit in the shortest possible time. To establish these conditions, apart from the semester average of the TRE, the term of the credit, the grace period and the payment flow corresponding must be negotiated with ENDE.

That in the aforementioned report from the GOM, it is concluded that it is necessary to enable a specific account in the name of ENDE to disburse the resources of the credit, prior to ENDE's request through the Ministry of Economy and Public Finance and the fulfillment of all the requirements established by the BCB Board for this effect. Likewise, a specific account must be enabled to provision the resources for the payment of the credit service (Capital and interest). In the corresponding credit contract possible guarantees and mechanisms must be established that ensure the amortization of the capital and the payment of the corresponding interest.

That the Legal Affairs Management in its Report BCB-GAL-SANO-2010-429 concludes that there is no legal impediment for the BCB Board to consider the approval of the granting of the credit in favor of ENDE in compliance with what is established in article 41 of the PGE-2010, article 8 of Law No. 050 and article 13 of Law No. 062, determining the financial conditions, by simple majority of votes of its members present in a meeting, as established by article 24 of the BCB Statute.

That by virtue of what is provided in article 44 of Law No. 1670, the BCB Board 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 and legal provisions applicable to the case.

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

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Article 1.- Approve within the framework of article 41 of the PGE-2010, article 8 of Law No.
050 and article 13 of Law No. 062, the granting of an extraordinary concessional credit to ENDE, for an amount of up to Bs32,523,750.90 (Thirty-two million five hundred twenty-three thousand seven hundred fifty 90/100 Bolivianos).

Article 2.- Authorize the President of the BCB to negotiate with ENDE the
conditions and terms of the credit contract indicated in the preceding
article, for its subsequent consideration and approval by the BCB Board.

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

La Paz, December 21, 2010

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Marcelo Zabalaga Estrada

_________________________ _________________________ Rolando Marín Ibáñez Hugo Dorado Araníbar _________________________ _________________________ Gustavo Blacutt Alcalá Ernesto Yáñez Aguilar ___________________ Rafael Boyán Téllez