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Bolivia seizes its power grid from Red Eléctrica in nationalisation plan
- 12 years ago (2012-05-02)
- Junior Isles
Bolivian president Evo Morales said he is nationalising and seizing control of the main power grid from Spanish-owned Red Eléctrica Corporaciión, which has operated most of Bolivia's electricity distribution since privatisation 15 years ago.
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Bolivia’s move comes after Argentina's controversial move last month to take control of oil firm YPF, despite Spanish energy company Repsol’s majority interest.
Spain's ambassador to La Paz has expressed concern at Spanish assets effectively being seized by foreign governments, with troops occupying Red Eléctrica’s offices in Cochabamba. He commented that the recent takeover "is sending a negative message that generates distrust".
Red Eléctrica is the sole operator of Spain’s transmission grid, and the Spanish government holds a 20 per cent stake in the company.
Red Eléctrica has made no immediate comment. The company had owned 74 per cent of Bolivia's electrical transmission network, or 1720 miles of high voltage lines.
Morales has not indicated how much Red Eléctrica will be compensated, but his nationalisation decree includes negotiation of a compensation fee.
Morales claimed only $81 million had been invested in Bolivia's power grid since it was privatised in 1997. Meanwhile, “[the government] invested $220 million in generation and others profited. For that reason, brothers and sisters, we have decided to nationalise electricity transmission," he said.
Argentinian president Cristina Fernández de Kirchner similarly blamed a lack of investment by Repsol for her decision to nationalise the oil company’s assets.
Previously, on May Day 2010, Morales' government took control of most of Bolivia's electrical generation, nationalising its main hydroelectric plants.
Bolivia's government is still in the process of negotiating compensation for the power plants taken from GDF Suez of France and Britain's Rurelec.