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Bolivia seizes Spanish company

Wednesday, May 02, 2012 - 02:01

May 2 - A second Spanish energy company has been seized by a Latin American country, after Red Electrica was nationalized by Bolivia. Andrew Potter reports.

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The new face of doing business in Bolivia. Army soliders surround the offices of Red Electrica, which is 20 percent owned by the Spanish government. As the banner says, it's being nationalised. Bolivian president Evo Morales was on hand to explain why. (SOUNDBITE) (Spanish) BOLIVIAN PRESIDENT EVO MORALES SAYING: "I want to let you know it's the obligation of the president, vice president and cabinet to organise these kinds of operations to get back what is ours. That's what we're doing." It's the latest headache for Spanish energy companies operating in Latin America. Last month Argentina nationalised YPF, which is owned by Spanish oil giant Repsol. So far the Spanish government hasn't come up with an effective response to Argentina, let alone Bolivia. (SOUNDBITE) (Spanish) SPAIN ECONOMY MINISTER, LUIS DE GUINDOS, SAYING: "We believe it's essential that the legal safety of investments in countries like Bolivia is maintained. What's more, Red Electrica offers a lot of services to the Bolivian economy and citizens." The European Commission says the latest nationalisation could hurt European trade with both countries. (SOUNDBITE) (French) TRADE SPOKESMAN FOR THE COMMISSION, JOHN CLANCY, SAYING: "It is worrying to see a situation that gives a bad atmosphere towards not only the European companies, but also companies in general as far as investments in a third-party country are concerned. Clearly an action that took place in Bolivia, like in Argentine, does not contribute to creating a good climate for investors in general." Two years ago Morales used May Day to nationalise four other electricity companies, including those partially owned by French and British companies. Analysts say the risk of more seizures increases as the president's popularity slides. Morales has justified the take over of Red Electrica by saying Spain hadn't invested in the company enough. That's the same argument used by Argentine president Cristina Kirchner to justify taking control of YPF. Andrew Potter, Reuters

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Bolivia seizes Spanish company

Wednesday, May 02, 2012 - 02:01