Bolivia nationalizes Iberdrola electricity companies
LA PAZ/MADRID (Reuters) - Bolivia nationalized two electricity distribution companies owned by Spanish utility Iberdrola (IBE.MC) on Saturday, the latest move by leftist President Evo Morales to assert control over the country's resources.
Iberdrola will be compensated according to a valuation to be drawn up by an independent arbiter, Morales said, adding that the measure was aimed at enhancing rural energy services.
"We considered this measure necessary to ensure equitable energy tariffs ... and to see to it that the quality of electricity service is uniform in rural as well as urban areas," Morales said.
President Morales has nationalized oil, telecommunications, mining and electrical generation companies.
In June, Morales took control of global commodities giant Glencore's (GLEN.L) tin and zinc mine in Bolivia and more nationalizations of mining companies could be ahead in the Andean country.
Iberdrola, whose office in capital city La Paz was being guarded by police on Saturday, has operated in Bolivia since the late 1990s. An Iberdrola spokesman said the company was studying the situation and declined to comment further.
Spain regretted Bolivia's actions, the Spanish Ministry of Foreign Affairs said in a statement on Saturday, adding the government hoped the shareholders of the companies involved would be fairly compensated.
"This decision by the Bolivian government involves companies that carried out the public service of distributing electricity that have never belonged to the Bolivian state," the statement said.
The Iberdrola units are Electropaz, which supplies around 470,000 customers in the cities of La Paz and El Alto; and Elfeo, which supplies over 80,000 customers in the city of Oruro.
The nationalization also includes two small suppliers owned by Iberdrola, which provide services to the distributors.
In 2006, Morales announced the takeover of petroleum companies operating in Bolivia. He later nationalized oil and gas reserves to redistribute wealth to the landlocked country's indigenous majority.
Iberdrola is not the first Spanish company to have its assets seized in Latin America.
Bolivia decided to nationalize a power transmission unit of power grid operator Red Electrica (REE.MC) in May, just weeks after Argentinean President Cristina Fernandez seized YPF (YPFD.BA), the country's biggest energy company, accusing oil major Repsol (REP.MC) of underinvesting at the unit.
Repsol called the move unlawful, discriminatory and a violation of a bilateral investment treaty between Spain and Argentina. The World Bank's arbitration body has agreed to begin an arbitration process on the Repsol case.
Other Spanish companies in Bolivia include bank BBVA (BBVA.MC) and motorway operator Abertis (ABE.MC), though exposure for each is less than 1 percent of revenues.
(Additional reporting by Blanca Rodriguez in Madrid and Hugh Bronstein in Buenos Aires; editing by Gunna Dickson)