Bolivian takeover criticised

The European Union and Spain have spoken out again the Bolivian government’s nationalisation of the local unit of Spanish power transmission company Red Electrica.

Bolivia’s leftist President Evo Morales justified the nationalisation by saying the company had failed to invest enough and he has “an obligation to.. recover what is ours”.

Brussels said the move sent a negative signal to international investors on doing business in Bolivia.

Spain’s Economy Minister Luis de Guindos said Madrid doesn’t like what has happened, but added: “Bolivia has assured the Spanish company it will get compensation for the money it has invested in the power network. The Spanish government will watch that closely, to make sure a fair price is paid.”

Red Electrica bought the Bolivian subsidiary ten years ago for 92 million euros, and is reported to have invested 60 million euros in the country’s electricity network.

At the same time Bolivia took pains to reassure Spanish energy group Repsol that its investments in the country are safe.

Morales made that pledge at the opening of a Repsol gas plant.

Repsol is obviously nervous following Argentina’s nationalisation of its stake in YPF subsidiary.

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