Bolivian Central Bank loans $ 1 bn to state energy firm

Bolivia's central bank loaned state-owned Yacimientos Petroliferos Fiscales Bolivianos $ 1 bn to finance projects in the energy sector. In the loan-signing ceremony, President Evo Morales said the most important aspect of the credit is that it will promote industrialization of the country's hydrocarbon reserves.
"Industrialization will ensure that Bolivia is no longer one of the most underdeveloped countries in the hemisphere and that it can lift itself up by its own hands. It's a wholesome, honourable and noble mission," Morales said.

The president also stressed the "enormous responsibility" YPFB workers have, referring to them as "soldiers" of Bolivia's economy.
For his part, YPFB chief Carlos Villegas said the loans will help the company implement projects that are part of its 2009-2015 investment plan. He said 30 % of the $ 1 bn will be invested "exclusively" in industrialization projects, while 34.7 % will be earmarked for production, 16 % to improve transport capacity and storage and 15 % to create a gas-separation plant in the Chaco region.

The remaining amount will go toward expanding and overhauling refineries in the provinces of Santa Cruz and Cochabamba. Villegas added that over the next five years YPFB will need to invest $ 10.74 bn to insure implementation of all the country's hydrocarbon projects.
The central bank governor, Gabriel Loza, said the loan is for a period of 20 years, with an interest rate of 1 % and a five-year grace period. He stressed that from a legal standpoint the loan is categorized as a "Central Bank credit to the public sector" and noted that that amount was authorized in the government's 2009 budget.

In his speech, Morales also referred to a recent corruption case at the state energy company, which came to light after a contractor carrying $ 450,000 in cash was killed by robbers outside the home of relatives of the wife of former YPFB boss Santos Ramirez. That money was supposedly a bribe being paid in connection with an $ 86 mm contract signed in 2008 between YPFB and Catler Uniservice and led to Ramirez being jailed.
"I hope there are no more 'little saints' out there stealing money. Maybe some friend could be thinking how to get some money (out of YPFB), but that's unforgivable. That's why I ask you for honesty, transparency, speed in investing," Morales said.

Bolivia has an estimated 48 tcf of natural gas, giving it the second-largest reserves in South America after Venezuela.