- Created: 03 May 2012
Information taken from Wall Street Journal article ‘Bolivia seizes Spanish power firm’ published 1 May 2012
To commemorate 1 May International Workers Day, Bolivian President Evo Morales seized the local assets of Spanish power grid operator Red Eléctrica Corp. and ordered the armed forces to take over its installations, the latest move against Spanish corporate interests in Latin America.The declaration on Tuesday came on the heels of Argentina's move in April to seize a 51% stake in Argentine oil company YPF from Spanish oil major Repsol YPF SA, which had held a 57.4% stake.
Morales announced the move at the local electric company's headquarters in Bolivia's third city of Cochabamba, as part of a televised ceremony to commemorate May day. He accused the company of failing to invest enough.
’Long live the First of May and long live nationalization,’ declared Mr. Morales. Nearby, the company's main building was draped in Bolivian flags and the checked flag of Bolivia’s indigenous movement.
Red Eléctrica, which owned and operated about 85% of Bolivia's electric power lines, said it would seek compensation from the Bolivian government. The expropriation is likely to further strain Spain's relationship with some of its former colonies in Latin America. Spain's corporate expansion in the region has helped diversify its economy at a time when it is struggling with one of its deepest economic crises in decades.
Spain has called on European and other global leaders to enact sanctions against Argentina in a bid to prod the country to fully compensate Repsol for the seizure of its Argentine unit. Bolivia's move took place on the same day that Repsol Chairman Antonio Brufau was in the country to attend the inauguration of facilities for exporting natural gas to Argentina. A Repsol spokesman declined to comment on the Bolivian decision.
Annual Tradition: Bolivian nationalizations on International Workers Day
May 1, 2006 -- Months after he takes office, Evo Morales's government nationalises Bolivia's natural-gas reserves.
2008 -- The government nationalizes the assets of the largest telephone company, run by Italy's Telecom Italia, as well as several energy industry companies.
2010 -- Four electric companies are nationalized, including the local units of French utility GDF Suez and British firm Ruralec Plc.
2011 – Announcements are made to nationalise mining companies from Canada and Switzerland, but the bid was unsuccessful.
2012 -- Government seizes Spanish firm Red Electrica's local unit