Commencement of negotiations following the nationalisation of TDE
The Chairman of Red Eléctrica meets with the Bolivian Minister of Hydrocarbons and Energy

The Chairman of Red Eléctrica, José Folgado, met in La Paz yesterday with the Minister of Hydrocarbons and Energy, Juan José Sosa, for a first meeting of institutional nature that transpired in a cordial manner. This meeting is the start of negotiations to fix adequate compensation following the nationalization of TDE (Transportadora de Electricidad), a subsidiary of Red Eléctrica Group. After the meeting a period of collaboration has been opened and the first step is to jointly look for and select an independent company of international recognition to conduct an assessment of TDE, in a process based on transparency and objectivity.

Red Eléctrica is willing to collaborate during the process to fix this compensation and trusts that it will reach an agreement to achieve adequate indemnification and thus defend the interests of its shareholders, both national and international.

Red Eléctrica respects the decision of the Bolivian Government to change the management model of the nation’s transmission grid from a private to a public model. However, Red Eléctrica does not share this decision aimed at amending a system that has been operated for some years now under internationally recognized quality standards, as evidenced by the high quality of the TDE transmission grid which has maintained a grid availability ratio of 99.7% over recent years.

TDE, like all the companies and areas of the Group have benefited from the technological excellence and knowledge of Red Eléctrica, and its continued ability to improve. Red Eléctrica is currently a world leader in transmission grid management and the operation of electricity systems, areas where it has obtained various recognitions and international awards.

Since the acquisition of TDE, Red Eléctrica has made a major investment effort in Bolivia. To the figure of more than 74 million dollars invested from 2002 to 2011, of which 69 correspond to transmission grid projects, another 14 million dollars in projects underway needs to be added, totalling an amount in excess of 88 million dollars. Moreover, the accounts reflect a high level of soundness of the Bolivian company with 25% gross leverage, a figure which is significantly low for an electricity infrastructure company.

In addition, Red Eléctrica has offered to collaborate with the Empresa Nacional de Electricidad (ENDE) so as ensure that no problems whatsoever occur in the management of Bolivia's electricity system and that the excellent quality and availability ratios of the transmission grid are maintained.