Spain’s Red Electrica de Espana (REE) says that it expects to receive compensation from the government of Bolivia after the assets of transmission firm Empresa Transportadora de Electricidad (TDE) were expropriated.
Bolivian president Evo Morales signed a supreme decree on May 1, 2012 to nationalise the shares in TDE owned by REE. The move follows the seizure of the Argentine assets of Repsol YPF just a week before.
In a statement REE said that it was ready to start negotiations with the government of Bolivia and that it would defend the interests of its national and international shareholders.
REE owns 99.94 per cent of the share capital of TDE and says that it has invested more than $74 million in the company since its acquisition in 2002. It has also allocated a further $14 million to projects that are already under way.
According to IHS Latin America energy analyst Juliette Kerr, the move to nationalisation has not come as a great surprise because Bolivia has a tradition of nationalising assets on May Day and in 2010 expropriated three electricity generation companies and one distribution company.
However the burden of investment needs in Bolivia’s electricity sector is falling increasingly on the government and the risk of power shortages is likely to increase, warns Kerr.
TDE owns almost 2000 km of high-voltage transmission lines and 22 electricity substations, equivalent to 73 per cent of the transmission lines in the national interconnected system.
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