Bolivian President Evo Morales on Saturday decreed the expropriation of four subsidiaries operated by Spanish power giant Iberdrola in the Latin American country.
The government alleged that the companies were charging consumers in rural areas more than twice the going rate, and said the move will ensure better service and coverage for all parts of the country.
This is the second nationalization of a Spanish-controlled business in less than eight months. In May, Morales expropriated Transportadora de Electricidad, a firm owned by Red Eléctrica de España, and has yet to offer compensation.
"We've been forced to take this measure to ensure electricity rates are fair and the quality homogenous in the rural and urban areas," said the Socialist leader.
A contingent of 740 strongly armed police officers was deployed to 28 strategic points of La Paz and Oruro, where two of the four nationalized firms are headquartered, to ensure that power continued to reach customers.
"We have talked to the company, we have entered into dialogue with the company," said Morales before a group of coca leaf producers in Cochabamba, where his voter base is located. "We asked them to acknowledge their responsibility as a company... Four months of negotiations without results."
Iberdrola reacted to the news with prudence, opting to wait before the details of the decision are released. A spokesperson said the company hopes the Bolivian government will "pay the real value" of its shares.
The decree sets out a period of 180 days for an independent appraisal company to set a compensation figure. Even though Iberdrola has not released a number, independent experts said the four nationalized subsidiaries are worth 100 million dollars (around 75 million euros).
The Bolivian communications minister, Amanda Dávila, told Spanish radio station Cadena Ser that the Morales administration will "pay the price of the company correctly and fairly" to make up for its investments.
Hydrocarbons and Energy Minister Juan José Sosa said Sunday that the government hopes to hold a "cordial" meeting with Iberdrola representatives during the coming week. "We will have a chat with them to see in what way we can come to a transaction that will be favorable to both parties," the minister told state television.