I do know that the Federal Senate has approved, and I, José Sarney, President, in the terms of art. 48, inciso XXVIII, of the Rules of Procedure, promulgated the following

R E S O L U UNK UNK No. 35, DE 2010

Authorizes the hiring of operation of external credit, with collateral of the Federative Republic of Brazil, worth up to ¥ 6,208,000,000.00 (six billion, two hundred and eight million yen), between the Basic Sanitation Company of the State of São Paulo (Sabesp) and Japan International Cooperation Agency (Jica), intended to finance, partially, the?Integrated Environmental Improvement Program in the Manancial Area of the Billings Rearrested?.

The Federal Senate resolves:

Art. 1º It is the Union authorized to grant warranty to the external credit operation, in the value of up to ¥ 6,208,000,000.00 (six billion, two hundred and eight million yen), to be celebrated between the Basic Sanitation Company of the State of São Paulo (Sabesp) and the Japan International Cooperation Agency (Jica).

Single Paragraph. Are the resources of this credit operation intended to fund, partially, the?Integrated Environmental Improvement Program in the Manancial Area of the Billings Rearrested?.

Art. 2º The credit operation referred to in art. 1º should be carried out under the following conditions:

I-dever: Basic Sanitation Company of the State of São Paulo (Sabesp) ;

II-credor: Japan International Cooperation Agency (Jica) ;

III-guarantor: Federative Republic of Brazil ;

IV-value: up to ¥ 6,208,000,000.00 (six billion, two hundred and eight million yen), with the amount of ¥ 5,362,000,000.00 (five billion, three hundred and sixty-two million yen) will be earmarked for civil works, plus contingencies and the commission of appointment, and ¥ 846,000,000.00 (eight hundred and forty-six million yen), to consulting services ;

V-term of disbursement: up to 7 (seven) years, counted from the duration of the contract ;

VI-amortization of the debtor balance: in 37 (thirty-seven) semi-annual and consecutive plots, in the measure of the possible equal values, paid always on day 20, winning the first installment 7 (seven) years after signing the contract, and the latter, 25 (twenty-five) years after signing the contract ;

VII-interest: required semestetionally and always paid on day 20, at rates of 1.2% a.a. (an integer and two tenths per cent per year) on the amount earmarked for the civil works and 0.01% a.a. (a hundredth per cent a year) on the intended for consultancy services, with, during the disbursement period, the first payment can already be made 1 (one) month after the subscription date of the loan agreement, coinciding, from of the termination of the disbursement period, with the dates of payment of the depreciation ;

VIII-interest on arrears: in case of mora, up to 2% a.a. (two per cent a year) above the interest due ;

IX-commission of engagement: up to 0.1% a.a. (one tenth per cent per year) on the undisbursed balance of the loan.

Single Paragraph. The dates of payment of the principal and the financial charges as well as of the planned disbursements may be changed depending on the date of signing of the loan agreement.

Art. 3º The exercise of the authorization referred to in the caputof the art. 1º is conditioned to which:

I-Sabesp celebrates contract with the Union for concession of contragaranties by means of the indication and linking of its own revenues ;

II-the State of São Paulo, duly authorized by this Resolution, conclude contract with the Union for the concession of contragarantias, in the form of binding of the recipes for which they treat the arts. 155, 157 and 159, all of the Federal Constitution, and other guarantees in law admitted, and the Federal Government may apply for the transfers of the resources required to cover the commitments honoured directly from the centralizing accounts of the state's fundraiser or the federal transfers, in the terms of the art. 167, § 4º, of the Federal Constitution ;

III-in advance of the signing of the contract, the Ministry of Finance checks and attests to the adimplance of Sabesp as to the payments and accounts of accounts of which it treats art. 10 of Resolution 48, 2007, of the Federal Senate.

Art. 4º The maximum period for the exercise of this authorization is 540 (five hundred and forty) days, counted from the duration of this Resolution.

Art. 5º This Resolution comes into force on the date of its publication.

Federal Senate, on August 6, 2010.

Senator Jose Sarney

President of the Federal Senate