Bolivia nationalization hurts investment climate: U.S.

By Agence France-Presse
Wednesday, May 2, 2012 17:27 EDT
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Bolivia's President Evo Morales via AFP
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WASHINGTON — The United States voiced concern Wednesday after Bolivia nationalized Spanish firm Red Electrica’s local grid, saying it will damage the country’s investment climate.

Bolivian President Evo Morales’s seizure of the Red Electrica subsidiary came just 15 days after Argentina’s much larger expropriation of Spanish oil giant Repsol’s YPF subsidiary.

“This comes on the heels, obviously, of the Argentine announcement,” State Department spokesman Mark Toner told reporters.

“And my response is going to sound similar, which is that… we are concerned by the Bolivian government’s decision and announcement to nationalize the Spanish-owned electricity company,” Toner added.

“These actions against foreign investors really dampen the investment climate in Bolivia, in Argentina, in wherever. So that’s our concern,” Toner said.

The latest nationalization sparked fears that other populist Latin American governments, especially those facing elections, could follow suit, and led to a warning from Europe that world investment may be affected.

Morales said he had issued a decree nationalizing Transportadora de Electricidad SA (TDE), and taking control of 99.94 percent of the company, which is a subsidiary of the Spanish group Red Electrica Corporacion.

According to the TDE website, it owns and runs almost three-quarters of the South American nation’s electric power lines, and in 2005 its assets amounted to $225 million.

Agence France-Presse
Agence France-Presse
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