Resolution 165/2011

BOARD RESOLUTION NO. 165/2011
SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES APPLICATION FOR CONCESSIONAL EXTRAORDINARY CREDIT TO THE NATIONAL ELECTRICITY COMPANY FOR AN AMOUNT OF Bs230,017,634.-

HAVING SEEN:
The Political Constitution of the State promulgated on February 7, 2009.
Law No. 1670, of the Central Bank of Bolivia (BCB), dated October 31, 1995.
The General State Budget for the 2010 management period (PGE-2010).
Law No. 050, dated October 9, 2010, modifying the PGE – 2010.
Law No. 062 of November 28, 2010, approving the General State Budget for the 2011 management period (PGE – 2011).
Law No. 111, dated May 7, 2011, on Extraordinary Modifications to the PGE-2011.
Supreme Decree No. 29644, dated July 16, 2008.
Supreme Decree No. 267, dated August 26, 2009.
Supreme Resolution No. 4990, dated January 14, 2011.
The Regulation for the Granting of Credit to National Strategic State-Owned Enterprises within the framework of the General State Budget for the 2010 and 2011 management periods, approved by BCB Board Resolution No. 23/2011, dated February 22, 2011, and its subsequent modifications.
ENDE Board Resolution No. 013/2011, dated May 26, 2011.
The notes from ENDE, references CB-CA-GGN-6/9-11; CB-CA-GGN-6/10-11 and CB-CA-GGN-6/11-11, all dated June 8, 2011.
The Ministerial Resolution of the Ministry of Hydrocarbons and Energy No. 496-11, dated December 15, 2011.
The note from the National Electricity Company (ENDE), reference ENDE-GGN-12/24-11, dated December 19, 2011.

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The Report from the Economic Policy Advisory Office BCB-APEC-SSMF-INF-2011-37, dated December 22, 2011.
The Report from the Monetary Operations Management BCB-GOM–SOSP–DCE-INF-2011-15, dated December 22, 2011.
The Report from the Legal Affairs Management BCB-GAL-SANO-INF-2011-481, dated December 22, 2011.
Minutes No. 66/2011 corresponding to the Extraordinary Meeting of the BCB Board of Directors on December 22, 2011.
The notes from the Presidency of the BCB, references BCB-PRES-CE-2011-1258 and BCB-PRES-CE-2011-1259, dated December 22, 2011.
The note from ENDE, reference ENDE-GGN-12/30-11, dated December 23, 2011.
The note from the Acting President of the BCB and the Minister of Hydrocarbons and Energy BCB-PRES-CE-2011-1260 MHE-10523-DESP-2523, dated December 23, 2011.
The note from the Ministry of Economy and Public Finance (MEFP), reference MEFP/VTCP/DGCP/UEPS-1965/2011, dated December 28, 2011.

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, among other attributions, the power to approve the contracting of loans that commit the general revenues of the State.

That Article 322 of the CPE establishes 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 rates, terms, amounts, and other circumstances are technically justified; and it states that public debt will not include obligations that have not been expressly authorized and guaranteed by the Plurinational Legislative Assembly.

That the PGE-2010 approved according to what is established by Article 158 numeral 11 of the CPE, 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 National Strategic State-Owned Enterprises 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, dated October 31, 1995”, referring to the prohibition of granting credits to the Public Sector and the need to document through negotiable debt securities issued by the General Treasury of the Nation (TGN), respectively.

That Law No. 50 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 BCB is exempted from the application of Articles 22 and 23 of Law No. 1670, dated October 31, 1995.

That within the framework of paragraph I of Article 41 cited and according to what is established by numeral 10, paragraph I of Article 158 and 322 of the CPE, ENDE is authorized to contract the aforementioned credit with the BCB.

That Article 8 of Law No. 50 establishes that the Ministry of Hydrocarbons and Energy (MHE), through Ministerial Resolution, must justify before 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 National Development Plan and that future cash flows will be used for the payment of the credit indicated in this article.

That Article 19 of Law No. 50 determines the release of ENDE from the application of Articles 33 and 35 of Law No. 2042 on Budgetary Administration. Consequently, ENDE is not subject to what is provided by the Regulation for the Registration of the Start of Credit Operations, approved by the Ministry of Economy and Public Finance (MEFP), through Ministerial Resolution No. 525, dated October 22, 2007, and modified through Ministerial Resolution No. 318, dated August 26, 2009.

That Law No. 62 approves the General State Budget for the 2011 management period (PGE-2011) and, through its Article 13, modifies Article 8 of Law No. 050, providing 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.- (Four billion eight hundred seventy-nine million 00/100 Bolivianos), with the object of financing productive investment projects and/or making capital contributions to its subsidiary companies, under concessional conditions; for which the BCB is exempted from the application of Articles 22 and 23 of Law No. 1670.

That within the framework of paragraph I of Article 13 of Law No. 62 and according to what is established by numeral 10, paragraph I of Article 158 and of Article 322 of the CPE, ENDE is authorized to contract the credit with the BCB.

That Article 13 of Law No. 62 which modifies Article 8 of Law No. 50, establishes that the MHE through Ministerial Resolution, must justify before the BCB that the use and

//4. B.R. No. 165/2011 destination of the resources of the credit to be acquired by ENDE is of national priority within the framework of the National Development Plan and that future cash flows will be used for the payment of the credits indicated in that article.

That Article 14 of Law No. 62 establishes that for the contracting and execution of concessional extraordinary credits, the validity of Article 19 of Law No. 50 is extended for the 2011 management period.

That, Law No. 111, dated May 7, 2011, which approves the modifications to the PGE-2011, in the Sixth Additional Provision authorizes the Ministry of Economy and Public Finance (MEFP), through the General Treasury of the Nation (TGN), to issue and grant Non-Negotiable Treasury Bonds in favor of the BCB to guarantee extraordinary credits granted by said entity in favor of the SOEs provided for in Law No. 62, upon written request of the lead sector Ministry and jointly with the BCB. For this effect, the MEFP is authorized to make the corresponding modifications for the budgetary registration according to the payment plan agreed upon in the contracts signed between the SOEs and the BCB.

That Supreme Decree No. 29644 has the object of establishing the legal nature of ENDE as a national strategic and corporate state-owned enterprise.

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

That by Supreme Resolution No. 4990, citizen Jhonny Nelson Caballero Vargas is appointed as Acting General Manager of ENDE.

That the Regulation for the Granting of Credit to National Strategic State-Owned Enterprises within the framework of the General State Budget for the 2010 and 2011 management periods, approved by BCB Board Resolution No. 023/2011 and its subsequent modifications, has the object of regulating the granting of credits by the BCB in favor of National Strategic State-Owned Enterprises (SOEs), within the framework of what is provided in the PGE-2010, modified by Law No. 50, and the PGE-2011 approved by Law No. 62.

That ENDE Board Resolution No. 013/2011 approves the Investment Plan and the Disbursement Schedule of the resources of the credit to be granted by the BCB. Likewise, ENDE attaches the breakdown of expenses in national and foreign currency.

That through notes CB-CA-GGN-6/9-11; CB-CA-GGN-6/10-11 and CB-CA-GGN-6/11-11, all dated June 8, 2011, ENDE sends to the MHE, MEFP and Ministry of Development Planning, the General Board Resolution No. 013/2011 which approves the Investment Plan and Disbursement Schedule of the resources destined for the execution of the “230 kV Chaco Tarija Transmission Line Project”.

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That by Ministerial Resolution No. 496-11, dated December 15, 2011, the MHE justifies before the BCB the following aspects: 1) It determines that according to the National Development Plan, the execution of the “230 kV Chaco - Tarija Transmission Line Project” is of national priority and will be executed by ENDE, for which it will request a credit of Bs230,017,634.- from the BCB, whose amount will be destined to the referred project and that future cash flows will be used for the payment of the credit; 2) It confirms the technical feasibility of the execution of the “230 kV Chaco - Tarija Transmission Line Project”, as stated in the MHE-DGE Report No. 0040/2011, issued by the Undersecretariat of Electricity and Alternative Energies (VMEEA); 3) It determines that according to the economic and financial evaluation of the “230 kV Chaco - Tarija Transmission Line Project”, contained in the MHE-VEEA-DGE Report No. 0090/2011, issued by the VMEEA, the payment capacity of the credit to be contracted with the BCB is ensured; and, 4) It authorizes the disbursement requests that ENDE makes to the BCB, according to the Credit Contract that is signed between said entities, committing, through the VMEEA, to follow up on the execution of the credit resources.

That through note ENDE-GGN-12/24-11, dated December 19, 2011, ENDE presents the application for a concessional credit of Bs230,017,634.- for the execution of the “230 kV Chaco Tarija Transmission Line Project” by ENDE, to which effect it sends the corresponding documentation and offers as guarantee the automatic debit of ENDE accounts opened at the BCB.

That the Economic Policy Advisory Office (APEC), in its Report BCB-APEC-SSMF-INF-2011-37, concludes that the credit requested by ENDE for the “230 kV Chaco Tarija Transmission Line” project of Bs230,017,634.- is part of the credit of Bs4,879,000,000, amount provided in the Base Monetary Program of the 2011 management period, which was incorporated in the Execution Decision of the Fiscal – Financial Program 2011 signed with the MEFP and the BCB on February 9, 2011 and approved through Board Minutes No. 008/2011, dated February 23, 2011. Regarding the impact of the credit requested by ENDE on the 2011 Monetary Program, the APEC informs that the credit of Bs230,017,634.- will not affect the compliance with the variables subject to measurement in said Program.

That the Monetary Operations Management (GOM), points out in its Report BCB-GOM–SOSP–DCE-INF-2011-15, that the financial conditions must be concessional within the framework of current regulations, under the financial conditions proposed by ENDE, and considering that the average TRE of the last six months reaches 1.55%, the degree of concessionality is 7.65% which exceeds the level provided in the regulations. To comply with the degree of concessionality provided in current regulations (2.3%), the credit could be granted at a rate of 1.40%, a level at which the concessionality reaches what is required. The recovery of the credit must be ensured in the shortest possible time, seeking to safeguard capital and complying with the degree of concessionality provided in the regulations.

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That the Legal Affairs Management within its competence and in compliance with clause c) of Article 5 of the Regulation for the Granting of Credit to National Strategic State-Owned Enterprises within the framework of the General State Budget - 2010 and 2011 Management Periods, in its Report BCB-GAL-SANO-INF-2011-481 concludes that the request made by ENDE for the granting of a credit of Bs230,017,634.-, falls within what is provided by current regulations, having complied with the presentation of the documents required in Article 2 of the Regulation for the Granting of Credit to National Strategic State-Owned Enterprises within the framework of the General State Budget - 2010 and 2011 Management Periods, so it corresponds to the BCB Board of Directors to consider the referred credit request, by two-thirds of the votes of the members present in the meeting.

That the BCB Board of Directors through Minutes No. 66/2011 of December 22, 2011, in virtue of Articles 13 and 14 of the PGE-2011 approved by Law No. 62, dated November 28, 2010, of the Ministerial Resolution of the MHE No. 496-11, dated December 15, 2011 and of what is established by the BCB Regulation for the Granting of Credit to National Strategic State-Owned Enterprises within the framework of the General State Budget 2010 and 2011 Management Periods, and on the basis of the Reports BCB-APEC-SSMF-INF-2011-37 from the APEC, BCB-GOM-SOSP-DCE-INF-2011-15 from the GOM and BCB-GAL-SANO-INF-2011-481 from the GAL, has determined to accept the credit request in Bolivianos for the amount of Bs230,017,634.- (Two hundred thirty million seventeen thousand six hundred thirty-four 00/100 Bolivianos), for a term of 30 years, with a grace period on capital of 5 years, with interest payments computable from the first disbursement, at an annual interest rate of 1.40%, setting the deadline for disbursements until March 31, 2014.

That in the referred Minutes, the Board determined not to accept the guarantees offered by ENDE, proceeding to request the issuance of Treasury Bonds to the MEFP, according to Article 4 numeral 3) of the BCB Regulation for the Granting of Credit to National Strategic State-Owned Enterprises within the framework of the General State Budget - 2010 and 2011 Management Periods.

That through notes BCB-PRES-CE-2011-1258 and BCB-PRES-CE-2011-1259, both dated December 22, 2011, the Acting President of the BCB communicates to the General Manager of ENDE and to the MHE, the decision of the Board of Directors of the Issuing Entity of December 22, 2011 regarding the conditions for the granting of a concessional extraordinary credit to ENDE for the “230kV Chaco Tarija Transmission Line Project”.

That the ENDE Board of Directors through Board Resolution No. 024/2011, dated December 23, 2011, attached to note ENDE-GGN-12/30-11, resolves to have no observations to the conditions of the Concessional Credit approved by the BCB Board of Directors, described in note BCB-PRES-CE-2011-1258.

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That through note BCB-PRES-CE-2011-1260 MHE-10523-DESP-2523-11, the Acting President of the BCB and the Minister of Hydrocarbons and Energy communicate to the Minister of Economy and Public Finance that according to the Regulation for the Granting of Credit to National Strategic State-Owned Enterprises within the framework of the General State Budget 2010 and 2011 Management Periods, the BCB Board of Directors has considered and approved, in favor of ENDE, the request for a concessional credit of Bs230,017,634.- for the “230kV Chaco Tarija Transmission Line Project”; however, said Board has not accepted the guarantee offered by said Company, so in order to facilitate the signing of the contract and make effective the credit required by ENDE, according to what is provided in Article 4 numeral 3 of the aforementioned Regulation, the issuance of the list of Treasury Bonds that will constitute the guarantee of the obligations contracted by ENDE is requested from the MEFP. To this effect, a detail of the amounts and maturity dates of the required bonds is attached.

That the Minister of Economy and Public Finance in note MEFP/VTCP/DGCP/UEPS-1965/2011 attaches the list with the serial numbers of the Non-Negotiable Treasury Bonds, that this State portfolio commits for the credit operation to be carried out within the framework of Article 13 of Law No. 062. In this regard, within the framework of Law No. 111, the MEFP will issue and deliver the corresponding Treasury Bonds to the BCB, immediately after each disbursement that the BCB makes in favor of ENDE, according to the disbursement schedule that is agreed upon in the BCB-ENDE-MHE Credit Contract.

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

That Article 6 of the Regulation for the Granting of Credit to National Strategic State-Owned Enterprises in the Framework of the General State Budget - 2010 and 2011 Management Periods establishes that the BCB Board of Directors, in consideration of the technical and legal reports, will consider the credit request and, if appropriate, approve it, through the favorable vote of two-thirds of its members present in the Board meeting, issuing the corresponding Resolution; and it 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 Articles 13 and 14 of Law No. 062 of November 28, 2010 which approves the PGE-2011, of the antecedents and provisions described above, the granting of a concessional extraordinary credit to ENDE under the following terms and conditions:

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Currency: Bolivianos.
Total Credit Amount: Bs230,017,634.- (Two hundred thirty million seventeen thousand six hundred thirty-four 00/100 Bolivianos).
Term: Thirty (30) years.
Grace Period: On capital five (5) years with interest payments computable from the first disbursement.
Annual Interest Rate: 1.40% (one point forty percent).
Deadline for Disbursements: Until March 31, 2014.
Payment Plan: Annual

Article 2.- Authorize the President of the BCB to sign the contract with 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, December 28, 2011
Lic. Marcelo Zabalaga Estrada
ACTING PRESIDENT

Lic. Rolando Marín Ibáñez Lic. Hugo Dorado Araníbar
DIRECTOR DIRECTOR
Dr. Gustavo Blacutt Alcalá Lic. Rafael Boyán Téllez DIRECTOR DIRECTOR