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Bolivia Nationalizes National Electric Grid

May 2, 2012

by AQ Online

Bolivian President Evo Morales on Tuesday announced his intention to nationalize a majority of the country’s electricity transmission system, which is currently administered by a number of private-sector companies. Transportadora de Electricidad S.A., part of the Spanish multinational, Grupo Red Electrica de España, holds a 74 percent stake in Bolivia’s electric grid and administers approximately 1,720 miles of high voltage lines. The remaining 26 percent of the grid is owned by individual domestic and foreign companies serving specific regions of the country.

The government justified this decision by characterizing as insufficient the $81 million that firms have spent on maintaining and expanding the grid over the past 16 years. In a press conference in La Paz’ Palacio Quemado, Morales said, “we are nationalizing the Transportadora de Electricidad in the name of the Bolivian people as homage to the workers who fought for the recovery of our natural resources and basic services.” The decree also said that the shareholders of the affected companies will be compensated, but did not specify exactly how.

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This latest move is part of a larger trend in Bolivia toward nationalization that began in 2006 and has affected numerous sections, including hydrocarbons, telecommunications and agriculture. The Morales government considers certain “basic services”—energy, water and telecommunications—to be strategically vital and subject to state ownership.

There is likely to be swift condemnation by foreign investors in the region, particularly in light of recent moves to by the Cristinia Fernández de Kirchner government in Argentina to nationalize that country’s largest energy firm, YFP.

Tags: Bolivia, Evo Morales, Cristina Fernandez de Kirchner, Nationalization in Bolivia, Bolivian Electricity

To speak with an expert on this topic, please contact the communications office at: communications@as-coa.org or (212) 277-8384.
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