Spain seeks 'legal security' from Bolivia after nationalisations

The Spanish government said Sunday it regretted the decision by Bolivia to nationalise units of Spain's Iberdrola utility group and stressed the importance of "legal security" for foreign investors.

"Legal security is a crucial requirement for all foreign investment in Bolivia," Industry Minister Jose Manuel Soria told ABC newspaper.

"I regret this decision, which was taken without notifying Spanish authorities who were surprised by the measures," Soria said.

Late Friday the foreign ministry issued a statement also regretting Bolivia's move.

"This decision by the Bolivian government involves companies that carried out the public service of distributing electricity that have never belonged to the Bolivian state," the statement said.

Bolivia nationalised electric utilities owned by Iberdrola on Saturday, sending police and troops to enforce the latest expropriation ordered by the populist leader of South America's poorest nation.

President Evo Morales announced a decree targeting Iberdrola-owned utilities Electropaz and Elfeo in the cities of La Paz and Oruro, his latest move to assert control over the country’s resources.

In La Paz, soldiers later took control of power plants that until now were run by Iberdrola, while police seized corporate offices.

Iberdrola said it hopes Bolivia will pay "a fair price" for the utilities nationalised by La Paz.

Iberdrola will be compensated according to a valuation to be drawn up by an independent arbiter, Morales said, adding that the measure was aimed at enhancing rural energy services.

Morales said he was acting because Iberdrola charged more for electricity in rural areas than it did in cities, and service was also uneven.

"We considered this measure necessary to ensure equitable energy tariffs...and to see to it that the quality of electricity service is uniform in rural as well as urban areas," Morales said.

Iberdrola is not the first Spanish company to have its assets seized in Latin America.

Bolivia decided to nationalise a power transmission unit of power grid operator Red Electrica in May, just weeks after Argentinian President Cristina Fernandez seized YPF, the country's biggest energy company, accusing oil major Repsol of underinvesting at the unit.

(FRANCE 24 with wires)