UPI | MAY 4, 2012
As confusing signals go, Bolivia achieved a double whammy by seizing a Spanish power generation company hours before welcoming Spanish energy giant Repsol into the country.
Bolivian President Evo Morales went to some length to indicate that his order to the military to take over the Red Electrica de Espana’s local operations wasn’t to be compared with Argentine appropriation of YPF Repsol’s energy assets in that country.
He was taking over the company, Morales said, but will compensate it adequately.
Both the United States and European Union said they were concerned the nationalization would damage investment climate in Bolivia, while Brazilian industry analysts said Argentine and Bolivian actions against foreign companies risked discouraging investors away from Latin America.
Latin America’s investor community and business analysts had no immediate comment on Morales’ order, which came shortly before the president inaugurated a Repsol gas processing plant that was originally intended to supply Argentina.
Whether that arrangement still holds, amid a bitter diplomatic row between Argentina and Spain over the YPF Repsol seizure in Argentina, remains unclear.
Morales accused Red Electrica de Espana of not investing enough profits into developing its Bolivian company TDE, echoing Argentine statements before the YPF Repsol takeover.
The seizure of Red Electrica de Espana leaves open the question of how the company will be run once nationalized. Spanish government sources said Bolivian government officials have been in talks with Madrid and promised fair compensation for assets and investments.