(Adds Spanish government comment)
By Carlos Quiroga and Sonya Dowsett
LA PAZ/MADRID Dec 29 Bolivia nationalised two
electricity distribution companies owned by Spanish utility
Iberdrola on Saturday, the latest move by leftist
President Evo Morales to assert control over the country's
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,"
President Morales has nationalised oil, telecommunications,
mining and electrical generation companies.
In June, Morales took control of global commodities giant
Glencore's tin and zinc mine in Bolivia and more
nationalisations of mining companies could be ahead in the
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
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
The nationalisation 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 nationalised oil and
gas reserves to redistribute wealth to the landlocked country's
Iberdrola is not the first Spanish company to have its
assets seized in Latin America.
Bolivia decided to nationalise a power transmission unit of
power grid operator Red Electrica in May, just weeks
after Argentinian President Cristina Fernandez seized YPF
, the country's biggest energy company, accusing oil
major Repsol 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
and motorway operator Abertis, 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)