The European Union and Spain have spoken out again the Bolivian government’s nationalisation of the local unit of Spanish power transmission company Red Electrica.
Brussels says the move sends a negative signal to international investors over doing business in Bolivia.
John Clancy, trade spokesman for the European Commission, the EU’s executive, said: “Actions like this one necessarily send a negative signal to international investors over the business and investment climate in Bolivia.”
“We trust the Bolivian authorities will fully uphold their investment agreements with Spain and ensure prompt and adequate compensation for this expropriation.”
Spain’s Economy Minister Luis de Guindos said Madrid does not like what has happened, but said Bolivia has guaranteed compensation will be paid.
He added: “We believe it’s fundamental to maintain legal security when investing in countries like Bolivia,”
Bolivia’s leftist President Evo Morales justified the nationalisation by saying the company had failed to invest enough and that he has “an obligation to.. recover what is ours.”
At the same time Bolivia took pains to reassure Spanish energy group Repsol’s chairman Antonio Brufau that its investments in the country are safe.
Morales made that pledge at the opening of a Repsol gas plant said to be worth around 100 million euros.
Repsol is obviously nervous following the recent nationalisation by Argentina of Repsol’s stake in its YPF subsidiary in Argentina.
Spain has so far struggled to come up with a strong response to Argentina’s move against Repsol, although the European Commission has said it is studying “all options”.