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  HOME | Bolivia

Bolivia Nationalizes Spanish-Owned Firm
Bolivia's President Evo Morales said that REE’s 99.94 percent stake in Transportadora de Electricidad will pass to state-owned Empresa Nacional de Electricidad, justifying the nationalization by pointing to what he described as the Spanish company’s inadequate investment in its Bolivian operations

LA PAZ – Bolivian President Evo Morales announced Tuesday the nationalization of an electricity distributor owned by Spanish utility REE.

“Again on this day, as just tribute to the workers and to the Bolivian people who have struggled for the recovery of natural resources and basic services, we nationalize Transportadora de Electricidad,” the leftist head of state said during a May Day event at the presidential palace.

REE’s 99.94 percent stake in Transportadora de Electricidad will pass to state-owned Empresa Nacional de Electricidad, Morales said, justifying the nationalization by pointing to what he described as the Spanish company’s inadequate investment in its Bolivian operations.

He then asked Bolivia’s armed force chief, Gen. Tito Gandarillas, to effect “the corresponding takeover of the facilities of administration and operation of TDE.”

TDE owns and operates the main Bolivian power grid, which supplies 85 percent of the domestic market for electricity.

La Paz nationalized four electricity producers in 2010, including subsidiaries of French giant GDF Suez and Britain’s Rurelec.

REE management issued a statement expressing regret and surprise over the expropriation and vowing to seek adequate compensation from the Bolivian government.

The Spanish government contacted Bolivian authorities after learning of the nationalization, official sources in Madrid told Efe.

Prime Minister Mariano Rajoy was being briefed on the details of the expropriation in consultation with Foreign Minister Jose Manuel Garcia-Margallo and Industry Minister Jose Manuel Soria, the sources said.

At first glance, the Rajoy administration sees the Bolivian action as “very different” from Argentina’s recent decision to nationalize oil company YPF, a unit of Spain’s Repsol, one source said, while stressing the government’s firm commitment to defending the interests of Spanish enterprises abroad.

Morales said Bolivia will take into account whatever investments REE has made in TDE.

“We are responsible with the companies,” he said Tuesday afternoon from TDE’s headquarters in the central Bolivian city of Cochabamba, where he traveled after making the initial announcement in La Paz.

“If a company has made investments, we acknowledge the investment and we will always acknowledge the investment,” the president told TDE employees, soldiers and government supporters.

Morales, the first indigenous president of Indian-majority Bolivian, has used previous May Day observances to announce similar moves to assert public control over the Andean nation’s resources and basic services.

The largest move was a takeover of Bolivia’s natural gas sector, which involved requiring foreign energy companies to become minority partners in joint ventures with state-owned YPFB. EFE
 

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