#1MINISTERIO DE ECONOMÍA Y FINANZAS Investor Presentation Republic of Ecuador 13 April 2020 Lenin Toda una Vida EL GOBIERNO DE TODOS#2DISCLAIMER THIS PRESENTATION IS SOLELY FOR USE AT THIS MEETING, IS PROVIDED FOR INFORMATION PURPOSES ONLY, AND IS NOT TO BE CONSTRUED AS AN OFFER OR SOLICITATION OF AN OFFER TO BUY OR SELL ANY SECURITIES OR RELATED FINANCIAL INSTRUMENTS OR AN INDUCEMENT TO ENTER INTO INVESTMENT ACTIVITY AND SHOULD NOT BE TREATED AS GIVING INVESTMENT ADVICE. THIS PRESENTATION DOES NOT CONTAIN ALL THE INFORMATION THAT IS MATERIAL TO AN INVESTOR OR FOR AN INVESTMENT DECISION, INCLUDING ANY DECISION WITH RESPECT TO THE CONSENT SOLICITATION, AND HAS NO REGARD TO THE SPECIFIC INVESTMENT OBJECTIVES, FINANCIAL SITUATION OR PARTICULAR NEEDS OF ANY RECIPIENT. NO REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, IS PROVIDED IN RELATION TO THE ACCURACY, COMPLETENESS OR RELIABILITY OF THE INFORMATION CONTAINED HEREIN. NO PART OF THIS PRESENTATION, NOR ITS USE, SHOULD FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR COMMITMENT OR INVESTMENT DECISION, INCLUDING WITH RESPECT TO THE CONSENT SOLICITATION. YOU ARE ADVISED TO OBTAIN A COPY OF THE CONSENT SOLICITATION STATEMENT FOR MORE COMPLETE INFORMATION ABOUT THE CONSENT SOLICITATION, AND TO CAREFULLY REVIEW THE INFORMATION CONTAINED THEREIN BEFORE MAKING ANY DECISION WITH RESPECT TO THE CONSENT SOLICITATION. THIS PRESENTATION IS NOT FINANCIAL, LEGAL, TAX, REGULATORY OR OTHER ADVICE. YOU SHOULD CONSULT YOUR OWN LEGAL, REGULATORY, TAX, BUSINESS, INVESTMENT, FINANCIAL AND ACCOUNTING ADVISERS TO THE EXTENT THAT YOU DEEM NECESSARY, AND YOU MUST MAKE YOUR OWN DECISION REGARDING THE CONSENT SOLICITATION AND THE REPUBLIC BASED UPON YOUR OWN JUDGMENT AND ADVICE FROM SUCH ADVISERS, AS YOU DEEM NECESSARY, AND NOT UPON ANY VIEWS EXPRESSED HEREIN, BY ATTENDING THE MEETING OR BY READING THE PRESENTATION SLIDES YOU AGREE AS FOLLOWS: THIS PRESENTATION HAS BEEN PREPARED BY OR ON BEHALF OF THE REPUBLIC, IS CONFIDENTIAL AND DOES NOT CONSTITUTE OR FORM PART OF, AND SHOULD NOT BE CONSTRUED AS, AN OFFER OR INVITATION TO SUBSCRIBE FOR, UNDERWRITE, TO PURCHASE, OR OTHERWISE ACQUIRE, OR A RECOMMENDATION REGARDING, ANY SECURITIES OF THE REPUBLIC NOR SHOULD IT OR ANY PART OF IT FORM THE BASIS OF OR BE RELIED ON IN CONNECTION WITH ANY INVESTMENT DECISION, INCLUDING WITH RESPECT TO THE CONSENT SOLICITATION. THIS PRESENTATION AND ITS CONTENTS ARE CONFIDENTIAL, AND NO PART OF IT OR ITS SUBJECT MATTER MAY BE COPIED, REPRODUCED, REDISTRIBUTED, PASSED ON, OR THE CONTENTS OTHERWISE DIVULGED, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON, OR PUBLISHED IN WHOLE OR IN PART FOR ANY PURPOSE WITHOUT THE PRIOR WRITTEN CONSENT OF THE REPUBLIC. IF THIS PRESENTATION HAS BEEN RECEIVED IN ERROR, IT MUST BE RETURNED IMMEDIATELY TO THE REPUBLIC. THIS PRESENTATION IS NOT DIRECTED TO, OR INTENDED FOR DISTRIBUTION TO OR USE BY ANY PERSON OR ENTITY THAT IS A CITIZEN OR RESIDENT OR LOCATED IN ANY LOCALITY, STATE, COUNTRY OR JURISDICTION WHERE SUCH DISTRIBUTION, PUBLICATION, AVAILABILITY OR USE WOULD BE CONTRARY TO LAW OR REGULATION OR WHICH WOULD REQUIRE ANY REGISTRATION OR LICENSING WITHIN SUCH JURISDICTION. THIS PRESENTATION IS ONLY BEING PROVIDED TO PERSONS THAT ARE (1) "QUALIFIED INSTITUTIONAL BUYERS" (QIBS) AS DEFINED IN RULE 144A UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED ("SECURITIES ACT") OR (II) PERSONS THAT ARE NOT U.S. PERSONS AS DEFINED IN REGULATIONS UNDER THE SECURITIES ACT. BY ACCEPTING DELIVERY OF THIS PRESENTATION THE RECIPIENT WARRANTS AND ACKNOWLEDGES THAT IT FALLS WITHIN THE CATEGORY OF PERSONS UNDER (1) OR (1) ABOVE. ANY FORWARDING, DISTRIBUTION OR REPRODUCTION OF THIS DOCUMENT IN WHOLE OR IN PART IS UNAUTHORIZED. FAILURE TO COMPLY WITH THIS DIRECTIVE MAY RESULT IN A VIOLATION OF THE SECURITIES ACT OR THE APPLICABLE LAWS OF OTHER JURISDICTIONS. THIS PRESENTATION MAY CONTAIN FORWARD-LOOKING STATEMENTS. THE WORDS "BELIEVE," "EXPECT," "ANTICIPATE," "INTEND," "PLAN," ESTIMATE," "EXPECT," "PROJECT," "FORECAST," "WILL," "SHOULD," AND "MAY" AND SIMILAR EXPRESSIONS AS WELL AS STATEMENTS OTHER THAN STATEMENTS OF HISTORICAL FACTS INCLUDING, WITHOUT LIMITATION, THOSE REGARDING FINANCIAL POSITION, STRATEGY, PLANS AND OBJECTIVES OF THE REPUBLIC FOR FUTURE ACTION (INCLUDING FINANCING AND DEBT MANAGEMENT PLANS AND OBJECTIVES) IDENTIFY FORWARD-LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER IMPORTANT FACTORS WHICH MAY AFFECT THE REPUBLIC'S ABILITY TO IMPLEMENT AND ACHIEVE THE ECONOMIC AND MONETARY POLICIES, FINANCING PLANS, BUDGETARY PLANS, FISCAL GUIDELINES AND OTHER BENCHMARKS SET OUT IN SUCH FORWARD-LOOKING STATEMENTS AND WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS TO BE MATERIALLY DIFFERENT FROM FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD- LOOKING STATEMENTS. SUCH FORWARD-LOOKING STATEMENTS ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE REPUBLIC'S PRESENT AND FUTURE POLICIES AND PLANS AND THE ENVIRONMENT IN WHICH THE REPUBLIC WILL OPERATE IN THE FUTURE. FURTHERMORE, CERTAIN FORWARD- LOOKING STATEMENTS ARE BASED ON ASSUMPTIONS OR FUTURE EVENTS WHICH MAY NOT PROVE TO BE ACCURATE. THE FORWARD-LOOKING STATEMENTS IN THIS PRESENTATION SPEAK ONLY AS OF THE DATE OF THIS PRESENTATION AND THE REPUBLIC EXPRESSLY DISCLAIMS TO THE FULLEST EXTENT PERMITTED BY LAW ANY OBLIGATION OR UNDERTAKING TO DISSEMINATE ANY UPDATES OR REVISIONS TO ANY FORWARD-LOOKING STATEMENTS CONTAINED HEREIN TO REFLECT ANY CHANGE IN EXPECTATIONS WITH REGARD THERETO OR ANY CHANGE IN EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH ANY SUCH STATEMENT IS BASED. NOTHING IN THE FOREGOING IS INTENDED OR SHALL EXCLUDE ANY LIABILITY FOR, OR REMEDY IN RESPECT OF, FRAUDULENT MISREPRESENTATION. THE INFORMATION IN THIS PRESENTATION HAS NOT BEEN INDEPENDENTLY VERIFIED. NO REPRESENTATION, WARRANTY OR UNDERTAKING, EXPRESS OR IMPLIED, IS MADE AS TO THE FAIRNESS, ACCURACY OR COMPLETENESS OF THE PRESENTATION AND THE INFORMATION CONTAINED HEREIN AND NO RELIANCE SHOULD BE PLACED ON IT. INFORMATION (INCLUDING MARKET DATA AND STATISTICAL INFORMATION) HAS BEEN OBTAINED FROM VARIOUS PUBLIC SOURCES. ALL PROJECTIONS, VALUATIONS AND STATISTICAL ANALYSES ARE PROVIDED TO ASSIST THE RECIPIENT IN THE EVALUATION OF MATTERS DESCRIBED HEREIN. THEY MAY BE BASED ON SUBJECTIVE ASSESSMENTS AND ASSUMPTIONS AND MAY USE ONE AMONG ALTERNATIVE METHODOLOGIES THAT PRODUCE DIFFERENT RESULTS AND, TO THE EXTENT THEY ARE BASED ON HISTORICAL INFORMATION, THEY SHOULD NOT BE RELIED UPON AS AN ACCURATE PREDICTION OF FUTURE PERFORMANCE. NONE OF THE REPUBLIC, ITS ADVISERS, REPRESENTATIVES, CONNECTED PERSONS, THE CONSENT SOLICITATION AGENT OR ANY OTHER PERSON ACCEPTS ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING, DIRECTLY OR INDIRECTLY, FROM THIS PRESENTATION OR ITS CONTENTS. THE INFORMATION CONTAINED HEREIN IS SUBJECT TO CHANGE WITHOUT NOTICE. MINISTERIO DE ECONOMÍA Y FINANZAS 1 Lenin EL GOBIERNO DE TODOS Toda una Vida#3TABLE OF CONTENTS | Macroeconomic Update Il Focus on Debt Management Ill Next Steps Lenin MINISTERIO DE ECONOMÍA Y FINANZAS 2 4 17 23 Toda una Vida EL GOBIERNO DE TODOS#4I MACROECONOMIC UPDATE MINISTERIO DE ECONOMÍA Y FINANZAS Lenin Toda una Vida EL GOBIERNO DE TODOS#5THE CURRENT ADMINISTRATION HAS ACCOMPLISHED SIGNIFICANT FISCAL CONSOLIDATION Despite inheriting a difficult financial situation, the current administration has sought to implement fiscal consolidation and prudent fiscal management throughout 2017, 2018 and 2019 • These efforts have been implemented mainly through a contraction of capital expenditures, a reduction of 5% in civil service wages in 2019 and fuel subsidy reforms enacted in early 2019 (those enacted in late 2019 were subsequently rolled back) OVERALL BALANCE OF THE NON-FINANCIAL PUBLIC SECTOR (% OF GDP) 2013 2014 2015 -4,6 SOURCE: MINISTRY OF ECONOMY AND FINANCE, REPUBLIC OF ECUADOR MINISTERIO DE ECONOMÍA Y FINANZAS -6,1 -6.0% PREVIOUS ADMINISTRATION 2016 4 -8,2 2017 2018 2019 -3,1 -2,8 -4,5 -3.5% CURRENT ADMINISTRATION Lenin START OF THE IMF PROGRAM I I EFF Toda una Vida EL GOBIERNO DE TODOS#6THE CURRENT ADMINISTRATION HAS MADE IMPORTANT PROGRESS IN ECONOMIC REFORMS 4 PILLARS OF THE PROSPERITY PLAN • 1. Fiscal consolidation and monetary stability • Fiscal Consolidation: Overall balance of the non-financial public sector improving from -8.2% of GDP in 2016 to -2.8% of GDP in 2019 Stable FX Reserves at around US$ 3.5bn (before external shocks) 2. Equal opportunities and social protection 3. Job creation and development of a productive economy Non-financial public sector deficit reduction of 5% in 2019 (from US$ 9.7bn projected to US$ 9.2bn) Bono de Desarollo Humano Plan Toda una Vida Bono Social Soberano Business Confidence Productive Development Law Employment Promotion Law Tax Simplicity and Progressivity Law Economic Reactivation Promotion of Ecuador Law US$ 1.1bn social investment, 150k additional beneficiaries in the Bono de Desarrollo Humano and 150k additional in Plan Toda una Vida First country in the world to issue a sovereign social bond for housing purposes (helping 24k people achieve access to decent housing) The business confidence index increased from 1,365 to 1,474 points in 2019 Elimination of the Income Tax advance Elimination of 100k retention agents Simplified tariffs procedures for exporters Elimination of the minimum tax, tax exemptions for new investments, elimination of the windfall tax 4. Efficient and transparent management of resources. Efficient Public Procurement Anti-Corruption Law Anti-Bribery Policies MINISTERIO DE ECONOMÍA Y FINANZAS LO US$ 900m in procurement savings from 2018 to 2019 Certified in ISO 37001 (anti-bribery management systems) Transparency International improved its ranking of Ecuador from 120 th in 2016 to 93rd in 2019 (global index) and 4th in South America Lenin EL GOBIERNO DE TODOS Toda una Vida#7HOWEVER, TWO MAJOR EXTERNAL SHOCKS HAVE CAUSED ECUADOR'S ECONOMIC PROSPECTS TO DETERIORATE SEVERELY 1 COVID-19 Crisis 2 Oil Price Shock MINISTERIO DE ECONOMÍA Y FINANZAS со EL Lenin Toda una Vida GOBIERNO DE TODOS#81 THE COVID-19 HEALTH CRISIS IS PUTTING PRESSURE ON ECUADOR'S ECONOMY AND PUBLIC FINANCES COVID-19 caused a precipitous fall in both domestic and global demand, damaging Ecuador's economy. An emergency response package followed by additional resources will be necessary to save and reactivate the economy IMPACT OF COVID-19 HEALTH CRISIS ON LATIN AMERICA COUNTRIES Confirmed cases per million people PANAMA 9.40 ECUADOR CHILE 340 DOMINICAN REPUBLIC 242 BARBADOS 233 SAINT KITTS AND NEVIS 226 ANTIGUA AND BARBUDA 214 PERU 179 URUGUAY 142 GRENADA 124 200 SOURCE: WORLDOMETER COVID-19 DATA AS OF 11 APRIL 2020 42 19 MINISTERIO DE ECONOMÍA Y FINANZAS 400 689 406 600 00 08 800 7 ECUADOR'S RESPONSE TO THE CRISIS • An initial US$ 3.9bn fiscal package has been approved in response to the COVID-19 outbreak Ecuador will allocate a US$ 0.7bn emergency package in response to the COVID-19 outbreak: US$ 0.3bn in Medical Expenditures (healthcare equipment, pharmaceuticals, tests...) US$ 0.4bn in Food and Health Assistance (est. cost for 2-3 months) Ecuador will also allocate a US$ 3.2bn facility to provide economic and social assistance to workers and companies • On 10 April 2020, the President announced a series of additional measures to tackle the COVID-19 crisis Lenin Toda una Vida EL GOBIERNO DE TODOS#9(2) THE COLLAPSE OF OIL PRICES AND RECENT SEVERE PRODUCTION CUTS DUE TO FORCE MAJEURE PARTICULARLY AFFECT GOVERNMENT REVENUES The sudden fall in oil prices has particularly affected Ecuador, considering the country's reliance on oil receipts: in 2019, gross oil revenues represented c.37% of budget revenues and c. 39% of exports. Moreover, the temporary halt in operations of Ecuador's two crude oil pipelines due to a landslide has led to a temporary cut in production from over 500,000 bpd to 65,000 bpd over the next 4-5 weeks, putting further pressure on oil revenues WTI AND ECUADOR MIX MARKET PRICES HAVE FALLEN C. 65% SINCE THE BEGINNING OF THE YEAR PRICE, IN US$/BBL 70 60 50 ECUADOR'S NET OIL REVENUES ARE EXPECTED TO DECREASE IN 2020 AS A RESULT OF DEPRESSED OIL DEMAND AND THE FALL IN OIL PRICES NET OIL REVENUES ESTIMATES, US$ BN OIL PRICE ECUADOR MIX (USS PER BARREL) 30.1 32.0 34.6 36.5 8,6 8,4 8,2 8,2 50 00 TELO DEL 20 20 10 ⚫WTI 0 TITULO DEL EJE SOURCE: PETROECUADOR (AS OF 7 APRIL 2020); ECUADOR MIX IS A 60-40 MIX OF ORIENTE AND NAPO MINISTERIO DE ECONOMÍA Y FINANZAS ECUADOR MIX 5,4 4,8 4,4 4,1 2020 2021 AS OF DECEMBER 2019 2022 2023 AS OF APRIL 2020 NOTE: ESTIMATES OF FUTURE OIL REVENUES ARE BASED UPON DATA PREPARED IN CONSULTATION WITH THE IMF. SUCH ESTIMATES ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE REPUBLIC'S PRESENT AND FUTURE POLICIES AND PLANS AND THE ENVIRONMENT IN WHICH THE REPUBLIC WILL OPERATE IN THE FUTURE. THESE ESTIMATES SPEAK ONLY AS OF THE DATE OF THIS PRESENTATION. SOURCE: MINISTRY OF ECONOMY AND FINANCE, REPUBLIC OF ECUADOR AS APRIL 2 Lenin EL GOBIERNO DE TODOS Toda una Vida#10EXTERNAL RESERVES PROVIDE A LIMITED BUFFER AGAINST THE PRESENT SHOCKS The level of reserves had been stable at c. US$ 3bn until the outbreak of the twin crises leaving the external position in a particularly fragile situation with only c. US$ 2bn of international reserves, or c. 1.4 month of imports ECUADOR NET INTERNATIONAL RESERVES US$ M EQUIVALENT IN MONTHS OF IMPORTS 1.8 2.2 2.0 2.3 2.3 2.1 2.1 2.9 2.3 1.8 1.9 2.4 2.2 1.4 5.130 3.973 4.084 4.095 4.098 3.772 3.808 3.282 3.488 3.397 3.568 3.179 3.280 1.990 FEB-19 MAR-19 APR-19 MAY-19 JUN-19 JUL-19 AUG-19 SEP-19 OCT-19 NOV-19 DEC-19 JAN-20 FEB-20 MAR-20 SOURCE: ECUADOR CENTRAL BANK MINISTERIO DE ECONOMÍA Y FINANZAS Lenin Toda una Vida EL GOBIERNO DE TODOS#11THE TWO SHOCKS HAVE RESULTED IN A RECESSION AND A DETERIORATION OF THE PRIMARY BALANCE ESTIMATES Real GDP growth is expected to fall to -6.3% this year, and the significant reduction in oil revenues will cause the primary balance to be negative REAL GDP GROWTH RATE PERCENT CHANGE 1,6 0,2 20 3,9 2,7 2,5 1,3 1,4 -6,3 2020 2021 2022 2023 AS OF DECEMBER 2019 AS OF APRIL 2020 PRIMARY BALANCE OF THE NON-FINANCIAL PUBLIC SECTOR PERCENT OF GDP 4,6 3,7 -1,2 4,2 4.2 0,8 2,1 22 -3,9 2020 2021 2022 2023 AS OF DECEMBER 2019 AS OF APRIL 2020 NOTE: ESTIMATES OF FUTURE GDP GROWTH ARE BASED UPON DATA PREPARED IN CONSULTATION WITH THE IMF. SUCH ESTIMATES ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE REPUBLIC'S PRESENT AND FUTURE POLICIES AND PLANS AND THE ENVIRONMENT IN WHICH THE REPUBLIC WILL OPERATE IN THE FUTURE. THESE ESTIMATES SPEAK ONLY AS OF THE DATE OF THIS PRESENTATION. SOURCE: MINISTRY OF ECONOMY AND FINANCE, REPUBLIC OF ECUADOR AS OF APRIL 13, 2020 NOTE: ESTIMATES OF FUTURE PRIMARY BALANCES ARE BASED UPON DATA PREPARED IN CONSULTATION WITH THE IMF. SUCH ESTIMATES ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE REPUBLIC'S PRESENT AND FUTURE POLICIES AND PLANS AND THE ENVIRONMENT IN WHICH THE REPUBLIC WILL OPERATE IN THE FUTURE. THESE ESTIMATES SPEAK ONLY AS OF THE DATE OF THIS PRESENTATION.. SOURCE: MINISTRY OF ECONOMY AND FINANCE, REPUBLIC OF ECUADOR AS OF APRIL 13, 2020 MINISTERIO DE ECONOMÍA Y FINANZAS 10 Lenin EL GOBIERNO DE TODOS Toda una Vida#12SIGNIFICANT DEBT SERVICE OBLIGATIONS ARE DUE IN THE NEXT SEVERAL YEARS Ecuador faces debt service obligations in the coming years, amounting to c. 25% on average of total expected government revenues ECUADOR PUBLIC DEBT SERVICE PROFILE (PRINCIPAL AND INTEREST) US$ BN 31% 25% 28% 25% 22% 19% 9,3 9,0 33 8,6 8,1 7,9 7,1 7,3 6,6 2020 MULTILATERALS (P) DEBT SERVICE IN % OF YEARLY REVENUES 593 5,3 3,9 2,8 2021 2022 2023 2024 2025 2026 MULTILATERALS (1) BILATERALS (P) 2027 BILATERALS () 2028 2029 EXT. BONDED DEBT (P) EXT. BONDED DEBT 0) DOMESTIC DEBT (P) EXT. PRIVATE NOT-BONDED (1) NOTE: THE AMOUNT OF DEBT SERVICE DUE FROM APRIL TO DECEMBER 2020 IS US$ 6.15 BN. ESTIMATES HAVE BEEN MADE IN CLOSE COLLABORATION WITH THE IMF AND ARE BASED ON MOST UP TO DATE DATA SOURCE: MINISTRY OF ECONOMY AND FINANCE, REPUBLIC OF ECUADOR MINISTERIO DE ECONOMÍA Y FINANZAS 11 2030 Lenin EXT. PRIVATE NOT-BONDED (P) DOMESTIC DEBT (I) Toda una Vida EL GOBIERNO DE TODOS#13AS A RESULT. GROSS FINANCING NEEDS (GFNS) ARE EXPECTED TO WIDEN Gross financing needs for 2020-2023 have more than doubled, when compared to December 2019 estimates ANNUAL GROSS FINANCING NEEDS BETWEEN 2020 AND 2024 US$ BN 13,0 10,2 9,6 90 9,0 7,1 5,6 4,7 4,5 4,1 3,8 2020 2021 2022 2023 2024 AS OF DECEMBER 2019 AS OF APRIL 2020 NOTE: ESTIMATES OF FUTURE FINANCING NEEDS ARE BASED UPON DATA PREPARED IN CONSULTATION WITH THE IMF. SUCH ESTIMATES ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE REPUBLIC'S PRESENT AND FUTURE POLICIES AND PLANS AND THE ENVIRONMENT IN WHICH THE REPUBLIC WILL OPERATE IN THE FUTURE. THESE ESTIMATES SPEAK ONLY AS OF THE DATE OF THIS PRESENTATION. SOURCE: MINISTRY OF ECONOMY AND FINANCE, REPUBLIC OF ECUADOR AS OF APRIL 13, 2020 MINISTERIO DE ECONOMÍA Y FINANZAS 12 Lenin Toda una Vida EL GOBIERNO DE TODOS#14MARKET ACCESS IS NO LONGER A FUNDING OPTION FOR ECUADOR The recent increase in risk premia reflects the general market shutdown for many high-yield issuers HISTORICAL YIELDS TO MATURITY OF ECUADOR SELECTED BONDS (IN %) 20 120 100 80 60 40 20 SOCIAL PROTESTS AFTER FUEL SUBSIDY CUTS BEGINNING OF THE COVID-19 CRISIS AND THE FALL OF OIL PRICES | I 0 1-OCT-19 16-OCT-19 31-OCT-19 15-NOV-19 30-NOV-19 15-DEC-19 30-DEC-19 14-JAN-20 -US$ 1.4BN 2030 9.500% US$ 1BN 2027 9.625% 29-JAN-20 -US$ 0.6BN 2025 7.875% 13-FEB-20 28-FEB-20 14-MAR-20 - US$ 4.1BN 2022 10.750% SOURCE: BLOOMBERG AS OF 7 APRIL 2020 MINISTERIO DE ECONOMÍA Y FINANZAS 13 Lenin Toda una Vida 29-MAR-20 EL GOBIERNO DE TODOS#15ADDRESSING THE 2020 FINANCING GAP WILL REQUIRE EXCEPTIONAL MEASURES • • • In an effort to address immediate short-term financing needs, Ecuador has engaged in discussions with the IMF to obtain emergency funding through a Rapid Financing Instrument (RFI) In parallel, the authorities are engaging with the IMF on a successor Fund-supported arrangement that would build on the current Extended Fund Facility (EFF), and aim at bolstering Ecuador's economic performance, strengthening the foundations of dollarization, and delivering broad-based benefits for all Ecuadorians However approximately US$ 3.4bn financing still needs to be identified and require a deferral or rescheduling of the interest payments 2020 GROSS FINANCING NEEDS AND ASSOCIATED FINANCING SOURCES US$ BN 13,0 1,7 PROGRAMMED LENDING 2,7 GROSS FUNDING NEEDS EXTERNAL FUNDING (MULTILATERAL BILATERAL,ETC.) DOMESTIC FUNDING SOURCE: MINISTRY OF ECONOMY AND FINANCE, REPUBLIC OF ECUADOR MINISTERIO DE ECONOMÍA Y FINANZAS 8,6 14 IDENTIFIED LENDING 1,4 1,4 2,4 CONTEMPLATED POTENTIAL OTHER MULTILATERAL CHINESE BILATERAL LOANS IMF FUNDING BUDGET SUPPORT Lenin FISCAL AUSTERITY MEASURES WILL NOT BE SUFFICIENT TO COVER THE REMAINING FINANCING GAP 3,4 REMAINING FINANCING GAP EL GOBIERNO DE TODOS Toda una Vida#16ECUADOR'S DEBT TRAJECTORY WILL BE AFFECTED BY RECENT DEVELOPMENTS Ecuador needs to take measures to ensure that the temporary exogenous shocks that have already become a liquidity problem do not evolve towards a debt sustainability issue PUBLIC DEBT-TO-GDP RATIO BETWEEN 2015 AND 2025 IN % ESTIMATES 75 70 65 60 55 50 45 40 35 30 25 2015 2016 2017 2018 2019 I 2020 2021 2022 2023 2024 2025 NOTE: ESTIMATES OF DEBT PROJECTIONS ARE BASED UPON DATA PREPARED IN CONSULTATION WITH THE IMF. SUCH ESTIMATES ARE BASED ON NUMEROUS ASSUMPTIONS REGARDING THE REPUBLIC'S PRESENT AND FUTURE POLICIES AND PLANS AND THE ENVIRONMENT IN WHICH THE REPUBLIC WILL OPERATE IN THE FUTURE. THESE ESTIMATES SPEAK ONLY AS OF THE DATE OF THIS PRESENTATION. SOURCE: MINISTRY OF ECONOMY AND FINANCE, REPUBLIC OF ECUADOR AS OF APRIL 13, 2020 MINISTERIO DE ECONOMÍA Y FINANZAS 15 Lenin Toda una Vida EL GOBIERNO DE TODOS#17II FOCUS ON DEBT MANAGEMENT MINISTERIO DE ECONOMÍA Y FINANZAS EL GOBIERNO DE TODOS Lenin Toda una Vida 16#18DEBT MANAGEMENT MAIN OBJECTIVES 1 PROVIDE IMMEDIATE LIQUIDITY RELIEF TO FACE THE COVID-19 OUTBREAK AND THE OIL PRICE COLLAPSE 2 PROVIDE THE NECESSARY BREATHING SPACE FOR A SOUND RECOVERY OF THE ECONOMY, WHICH MAY INVOLVE A FURTHER DEFERRAL OR RESCHEDULING OF THE PAYMENTS THAT THE CONSENT SOLICITATION IS PROPOSING TO DEFER 3 REDUCE FUTURE REFINANCING RISKS AND AVOID REFINANCING WALLS 4 CONTINUE TO WORK WITH THE IMF AND OTHER MULTILATERALS MINISTERIO DE ECONOMÍA Y FINANZAS EL 17 Lenin GOBIERNO DE TODOS Toda una Vida#19PRINCIPLES OF THE DEBT MANAGEMENT Ecuador will intensify engagement with its debtholders on the basis of the following principles: Transparency Good faith efforts for a collaborative process to restore debt sustainability Fair treatment across eligible creditors. ✓ Consistency with IMF debt sustainability analysis EL Lenin GOBIERNO MINISTERIO DE ECONOMÍA Y FINANZAS 18 DE TODOS Toda una Vida#20DEBT MANAGEMENT PERIMETER The contemplated debt management operation will cover all the main debt categories of the Republic of Ecuador AMOUNT (US$ BN) RESOLUTION BANKS 3,1 BONDS INCLUDED IN THE CONSENT SOLICITATION 19,2 INTERNATIONAL BONDS 0.2 PETROAMAZONAS BOND DOMESTIC BONDS BILATERAL MULTILATERAL 6,4 13,8 13,4 Bilateral discussions in view of credit conditions All international bonds are expected to take part in the debt sustainability operation Domestic sector debt roll-over and interest payments to be rescheduled in order to give breathing space while ensuring domestic sector sustainability Official sector is expected to provide support through new money NOTE: DEBT STOCK AS OF END-FEBRUARY 2020 SOURCE: MINISTRY OF ECONOMY AND FINANCE, REPUBLIC OF ECUADOR MINISTERIO DE ECONOMÍA Y FINANZAS 19 Lenin EL GOBIERNO DE TODOS Toda una Vida#21III NEXT STEPS MINISTERIO DE ECONOMÍA Y FINANZAS Lenin Toda una Vida EL GOBIERNO DE TODOS#22TIMELINE . April 8, 2020- Launch of the Consent Solicitation April 13, 2020- Investor Presentation by Minister to Market/Bondholders April 17, 2020, 5:00 pm NYT - Expiration of Consent Solicitation. Execution on or as soon as practicable after Required Consents are received • Second half of April 2020 - Expected IMF decision on the Rapid Financing Instrument (RFI) • April 24, 2020 - Expiration of Grace Period, and Legal Default unless the consent solicitation offer is successful • May-June 2020 - Investor consultations • Mid-June 2020 - Expected successor IMF program ⚫ June - July 2020 - Debt sustainability transaction EL MINISTERIO DE ECONOMÍA Y FINANZAS 23 Lenin GOBIERNO DE TODOS Toda una Vida