The unit, a power transmission company that administers 1,900 kilometers of power lines in Bolivia, is called TDE.
Bolivia is nationalizing the local unit of Spain's Red Electrica, President Evo Morales said on Tuesday, a move that could further widen the breach between foreign investors and the South American country.
The unit, a power transmission company that administers 1,900 kilometers of power lines in Bolivia, is called TDE.
News of the takeover came as Argentina's Congress gets set to approve the government's plan to expropriate a 51% stake in the country's No 1 oil company, YPF, majority-owned by Spain's Repsol. Morales said the expropriation of Cochabamba-based TDE stems from the company's lack of investment in Bolivia, an accusation similar to the argument used by Argentina to justify its takeover of YPF. "In honor of all Bolivian people who have struggled to recuperate our natural resources and basic services, we are nationalizing Transportadora de Electricidad (TDE)," Morales said during an address marking Workers Day.
"We do this in the name of the Bolivian people and for the benefit of the Bolivian people," he said, adding that he had ordered the army to take over TDE installations. Red Electrica officials were not immediately available for comment, but a Spanish government source in Madrid said authorities were in touch with La Paz to discuss technical and diplomatic aspects of the nationalization. Red Electrica indirectly holds 99.9% of TDE. The unit reported net profits of 12.5 million euros last year, or less than 3% of Red Electrica's 2011 net profits.
In 2006, Morales used the May 1 holiday to announce the takeover of petroleum companies operating in Bolivia. He later nationalized oil and gas reserves to redistribute wealth to the landlocked country's indigenous majority. Morales, Venezuelan President Hugo Chavez and Ecuador's President Rafael Correa are leading a push in the region for governments to reclaim control over natural resources. South America is a major supplier of commodities, particularly for the emerging economies of Asia.
Argentina, one of the world's top grains exporters, is expected on Thursday or Friday to get final legislative approval for a bill taking control of YPF.
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