Only a week after Argentina seized 51% of oil giant YPF from Spanish firm Repsol, the Bolivian president, Evo Morales, has now announced that his government will nationalise Bolivia’s electricity sector by seizing control of its main power grid from Spanish owned company Red Electrica Corporacion SA.
The president ordered his troops to occupy the company headquarters on May Day, the international day of the worker.
Spain’s ambassador to Bolivia, Ramon Santos, said the takeover “is sending a negative message that generates distrust.”
The Spanish government holds a 20 percent stake in Red Electrica, the sole operator of the Spanish national grid.
Morales said he has taken this step as there has not been enough investment in the company since it was privatised in 1997. Only $81 million have been invested from abroad whereas the government have put in over $220 million. “For that reason, brothers and sisters, we have decided to nationalize electricity transmission,” Morales said.
Lack of investment is similar to the reason provided by Argentinian president Cristina Kirchner when justifying the take over of YPF.
There has not yet been talk of compensation for the Spanish company, but the nationalisation decree says the state would negotiate an indemnisation fee.
Spain’s government had no comment on Tuesday.