Brussels, 02/05/2012 (Agence Europe) - Following Argentina's expropriation from Spanish oil company Repsol, Spain has suffered further disappointment in Latin America with Bolivia's nationalisation of electricity company Red Electrica's local subsidiary. The European Commission is demanding that Bolivia provide sufficient compensation.
A fortnight after Argentina's nationalisation of YPF, the local subsidiary of Spanish company Repsol, Bolivia has expropriated Spanish electricity company Red Electrica of its local subsidiary. Bolivian president, Evo Morales, decided on Tuesday 1 May that the local subsidiary of Spanish company Red Electrica, Transportadora de Electricidad, would be nationalised. Morales has signed a law to take control of the 99.94% share of Transportadora de Electricidad held by the Spanish company, which used to own two-thirds of the Bolivian electricity grid.
Reacting to the decision on Wednesday, the European Commission expressed concern and called for rapid and adequate compensation to be granted to Red Electrica by the Bolivian government. John Clancy, a spokesman for EU Trade Commissioner Karel De Gucht, said such measures inevitably sent a negative message to international investors about Bolivia's business and investment climate. He said in a press release that the Commission is certain that the Bolivian government will fully respect the investment deals it has signed with Spain and will speedily pay suitable compensation for the expropriation, adding that the European Commission will be monitoring developments closely.
The Bolivian government's decision has been sharply criticised by the Spanish government, which calls for a fair price to be paid for one of its flagship industries, but sees it as an isolated event rather than a general trend throughout Latin America. On Wednesday the Spanish economy minister, Luis de Guindos, rejected any connection between the Bolivian case and the recent nationalisation of Spanish oil company Repsol's subsidiary in Argentina. (EH/transl.fl)