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Bolivia nationalizes unit of Spain’s Red Electrica

02 May 2012 13:14 (UTC +04:00)

Baku - APA-Economics. Bolivia’s leftist President Evo Morales marked May Day on Tuesday by nationalizing the local unit of Spain’s Red Electrica, ratcheting up tension between the former colonial power and South American governments eager to assert control over energy resources, APA reports quoting Reuters.

Morales ordered the army to take over the Cochabamba headquarters of the power transmission company known as TDE.

The move came two weeks after Argentina unveiled a plan to take control of the country’s No. 1 oil company, YPF, from majority shareholder Repsol, based in Madrid.

Morales said the TDE nationalization stems from the company’s lack of investment in Bolivia. Argentina used a similar justification for its takeover of YPF.

"In honor of all Bolivian people who have struggled to recuperate our natural resources and basic services, we are nationalizing Transportadora de Electricidad (TDE)," Morales said during his official address for May Day, also known as International Workers Day.

"Bolivia still needs partners, but not owners," he said after ordering the army to take over TDE’s installations. TV images showed armed soldiers controlling access to and from the company’s headquarters.

Spain’s government, which vowed to halt imports of Argentine biodiesel after the seizure of YPF, had no immediate comment on Tuesday while it evaluated Bolivia’s announcement.

"This, and the Argentine nationalization of 51 percent of YPF, are developments that concern foreign investors, and domestic investors as well," said Alberto Ramos, who analyzes Latin America for Goldman Sachs.

"But fortunately this type of event is circumscribed to a small set of countries in the region that are pursuing heterodox economic experiments and that are increasingly less integrated into the global economy," Ramos added.

TDE administers 1,900 kilometers of power lines in Bolivia. Red Electrica indirectly holds 99.9 percent of the company, which reported net profits of 12.5 million euros last year, accounting for less than 3 percent of Red Electrica’s 2011 net profits.