Resolution 218/2012

BOARD RESOLUTION NO. 218/2012
SUBJECT: MONETARY OPERATIONS MANAGEMENT – APPROVES CONCESSIONAL EXTRAORDINARY CREDIT TO THE SAN BUENAVENTURA SUGAR COMPANY (EASBA) FOR AN AMOUNT OF Bs245,000,000.-

HAVING 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. 2042 on Budget Administration of December 21, 1999.
The General State Budget for the 2012 management period (PGE-2012).
Law No. 211 of December 23, 2011, which approves the PGE – 2012.
Supreme Decree No. 637 of September 15, 2010.
The Regulation of the Central Bank of Bolivia for the Granting of Credit to National Strategic Public Enterprises (EPNE) within the framework of the General State Budget for the 2010, 2011, and 2012 management periods, approved by BCB Board Resolution No. 23/2011 of February 22, 2011, and modified by Board Resolutions Nos. 026/11, 027/11, 030/11, 097/11, 039/12, and 064/12. Notes from the San Buenaventura Sugar Company EASBA – GG – No. 0566, 567, and 568/2012 of December 10, 2012. Administrative Resolution No. 119-A/2012 issued by the General Manager of EASBA on November 26, 2012. Ministerial Resolution of the Ministry of Productive Development and Plural Economy MPDyEP/DESPACHO/N°226.2012 of December 7, 2012. Supreme Resolution 05137 of February 10, 2011. Ministerial Resolution No. 532 of August 16, 2012, from the Ministry of Economy and Public Finance. Notes from the San Buenaventura Sugar Company EASBA – GG No. 563, 564, and 565/2012 dated December 7, 2012. The Report from the Economic Policy Advisory BCB-APEC-SSMF-INF-2012-040 of December 14, 2012.

//2. B.R. No. 218/2012
The Report from the Monetary Operations Management BCB-GOM-SOSP-INF-2012-9 of December 10, 2012.
The Report from the Legal Affairs Management BCB-GAL-SANO-INF-2012-408 of December 18, 2012.

CONSIDERING:
That the Political Constitution of the State (CPE), approved by referendum on January 25, 2009, and promulgated on February 7, 2009, in item 6 of its Article 9, establishes that it is the end and function of the State to promote and guarantee the responsible and planned use of natural resources, and to boost their industrialization, through the development and strengthening of the productive base in its different dimensions and levels. Likewise, in item 10 of paragraph I of Article 158 and Article 322, it establishes that the Plurinational Legislative Assembly has the attribute to approve the contracting of 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 the principal and interest is demonstrated, and the most advantageous conditions in 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 Law No. 211 in its Article 19, item 1, establishes that within the framework of the General State Budget (PGE – 2012), the BCB is authorized to grant to the San Buenaventura Sugar Company (EASBA) an extraordinary credit of up to Bs245,000,000.- (Two hundred forty-five million 00/100 Bolivianos) on concessional conditions with the objective of financing productive investment projects, for which the Central Bank of Bolivia is excepted from the application of Articles 22 and 23 of Law No. 1670 of October 31, 1995.

That within the framework of paragraph I of the mentioned article and according to what is established by Item 10, Paragraph I of Arts. 158 and 322 of the Political Constitution of the State, the San Buenaventura Sugar Company (EASBA) is authorized to contract the credit.

That according to item III, it corresponds to the Ministry of Productive Development and Plural Economy (MDPEP) to evaluate and monitor the resources of the credit to be granted by the Central Bank of Bolivia in favor of the San Buenaventura Sugar Company (EASBA).

That according to item IV, the Ministry of Economy and Public Finance (MEFP) is authorized through the General Treasury of the Nation (TGN) 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 San Buenaventura Sugar Company (EASBA), upon written request of the lead sector Ministry and jointly with the BCB.

That according to item V, EASBA is excepted from the effects and scope of the application of Arts. 33 and 35 of Law No. 2042 of December 21, 1999 on Budget Administration.

That according to item VI, the Ministry of Productive Development and Plural Economy (MDPEP), through Ministerial Resolution, must justify before the BCB that the use and destination of the credit resources to be acquired by EASBA are of national priority within the framework of the National Development Plan and that future cash flows will be used to pay the credit indicated in the present article.

That through Supreme Decree No. 637, EASBA is created as an EPNE, providing that EASBA does not have a Board of Directors, its highest Executive Authority being the General Manager designated by Supreme Resolution.

That the Regulation for the Granting of Credit to National Strategic Public Enterprises within the framework of the General State Budget for the 2010, 2011, and 2012 Management Periods, approved by Central Bank of Bolivia Board Resolution No. 023/2011 and modified by Board Resolutions No. 026/2011, No. 027/2011, No. 030/2011, 097/2011, 039/2012, and 064/2012, has the object of regulating the granting of credits by the BCB in favor of EPNEs, within the framework of what is provided in the PGE-2010, modified by Law No. 50, the PGE-2011 approved by Law No. 62, and the PGE-2012 approved by Law No. 211.

That through notes EASBA – GG - No. 0566, 0567, 0568/2012 dated December 10, 2012, and within the framework of what is established in Law 211, EASBA requests the BCB to grant a credit on concessional conditions with the objective of financing productive investment projects for Bs245,000,000 (Two hundred forty-five million 00/100 Bolivianos) and proposes for the payment of the debt a term of 20 years at a concessional interest rate of 0.85% annually on balances, of which 5 years are for the grace period and 15 years for the payment of principal and interest. Likewise, it presents the Investment Plan (2013-2015), the Disbursement Schedule, and the Proposed Payment Plan.

That Ministerial Resolution MPDyEP/DESPACHO/N°226.2012 of December 7, 2012, the Ministry of Productive Development and Plural Economy, justifies before the BCB the following: 1) That according to the NDP, the execution of the EASBA project is of national priority and will be executed by it, through its General Management, for which it authorizes EASBA to request a credit of Bs245,000,000 from the BCB, provided for in Article 19 of Law 211 of December 23, 2011. 2) The financed funds will be

//3. B.R. No. 218/2012 destined to finance the implementation of the San Buenaventura Sugar Company EASBA - whose cash flows generated by its industrialization will be destined to pay the credit acquired with the BCB. 3) It authorizes the disbursement request directed to the BCB and instructs the General Directorates of Administrative Affairs and Planning of the Ministry of Productive Development and Plural Economy to monitor the credit resources.

That through Administrative Resolution No. 119/A/2012, the General Manager of EASBA approves the Investment Plan, the Payment Plan, and the Disbursement Schedule, with a breakdown of national currency expenses and foreign currency expenses.

That through notes Cite: EASBA – GG No. 563, 564, and 565/2012 dated December 7, 2012, EASBA informs the Ministry of Productive Development and Plural Economy, the Ministry of Economy and Public Finance, and the Ministry of Development Planning of the approval of the Investment Plan.

That the Monetary Operations Management indicates in its report BCB-GOM–SOSP–INF-2012-9, dated December 14, 2012, concludes that, 1) The financial conditions of the credit must be concessional within the framework of current regulations. 2) Reviewed the degree of concessionality and the payment conditions of the requested credit, it proposes an interest rate of 0.87%, as established in R.M. 532. 3) It suggests accepting the method of payment of accrued interest for the first five years in a single payment at the end of the fifth year. 4) The Ministry of Economy and Public Finance (MEFP) through the General Treasury of the Nation (TGN) must issue and grant Non-Negotiable Treasury Bonds in favor of the BCB to guarantee the amount of the credit granted to EASBA. 5) The recovery of the credit must be ensured in the shortest possible time, seeking to safeguard the capital and comply with the degree of concessionality provided for in the regulations.

That the Legal Affairs Management concludes that the request made by EASBA, through note CITE: EASBA – GG - No. 0566/2012 complemented by note CITE: EASBA – GG - No. 0592/2012, for the granting of a credit for the execution of productive investment projects, has complied with the presentation of the documents required in Article 2 of the Regulation for the Approval of Credit to National Strategic Public Enterprises within the framework of the General State Budget – Management 2010, 2011, and 2012, so it corresponds to the Board of Directors of the BCB to consider the referred credit request, by two-thirds of the votes of the members present in the meeting.

That by 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 EASBA in order to comply with what is expressly provided in the PGE-2012 and applicable legal provisions to the case.

//4. B.R. No. 218/2012
That Article 6 of the Regulation for the Granting of Credit to National Strategic Public Enterprises within the Framework of the General State Budget - Management 2010, 2011, and 2012 establishes that the Board of Directors of the BCB, considering the technical and legal reports, will consider the credit request and, if applicable, 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 preparation 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 Article 19 of Law No. 211 of December 23, 2012, which approves the PGE- 2012, of the antecedents and provisions described above, the granting of a concessional extraordinary credit to EASBA under the following terms and conditions:

Currency: Bolivianos.
Total Credit Amount: Bs245,000,000.- (Two hundred forty-five million 00/100 Bolivianos).
Term: 20 years.
Grace Period: 5 years on principal and payment of accumulated interest at the end of the fifth year.
Annual Interest Rate: 0.87% (zero point eighty-seven percent) Method of Interest Payment: The interest accrued during the first five years will be paid in the fifth year in a single payment. From the sixth year onwards, payments will be annual together with the principal.
Guarantee: Treasury Bonds
Deadline for Disbursements: Until December 30, 2015.
Payment Plan: Annual.

Article 2.- Authorize the President of the BCB to sign the contract with the San Buenaventura Sugar Company under the terms of this Resolution.

//5. B.R. No. 218/2012
Article 3.- The Presidency and the General Management are in charge of the execution and compliance of this Resolution.

La Paz, December 18, 2012

---

Marcelo Zabalaga Estrada

_________________________ _________________________ Rafael Boyán Téllez Hugo Dorado Araníbar

_________________________ _________________________ Rolando Marín Ibáñez Gustavo Blacutt Alcalá

---

Abraham Pérez Alandia