Process for acquisition

Acquisition of New Assets

Law 17/2007 of 4 July confirmed Red Eléctrica at the helm of the transmission grid as well as granting to it the status of sole transmissioner on an exclusive basis. In 2010, Red Eléctrica has carried out, in compliance with Law 17/2007, the acquisition of the extrapeninsular assets (Balearic and Canary Islands), as well as those transmission assets on the peninsula that were property of the electric utility companies.

Passing this Law has been the final step in the process of acquiring assets that began in November 2002 and which has allowed Red Eléctrica to increase its assets base. This acquisition is of the utmost strategic importance for Red Eléctrica: this supposes the definitive consolidation of its position as sole transmissioner and electricity system operator (Spanish TSO -Transmission System Operator).

Process of acquisition

On 29^th July 2010, Red Eléctrica and Hidrocantábrico Distribución Eléctrica have reached an agreement regarding the acquisition by Red Eléctrica de España S.A.U. of assets comprising the electricity transmission grid currently owned by Hidrocantábrico Distribución Eléctrica.

On 23^th July 2010, Red Eléctrica and Unión Fenosa Distribución have reached an agreement regarding the acquisition by Red Eléctrica de España S.A.U. of certain assets comprising the electricity transmission grid currently owned by Unión Fenosa Distribución, S.A.U. Excluded from this operation are those facilities of 220 kV which, due to their particular characteristics and functions, remain under the ownership of the distributor within the area.

On 1^st July 2010 Red Eléctrica and Endesa signed an agreement through which Endesa Distribución has sold all of its owned transmission assets to Red Eléctrica. This agreement has been carried out in accordance with that established in the 9th Transitory Provision of Law 17/2007 of 4 July 2007. The transaction shall affect both the insular and peninsular electrical energy transmission grids. In the Canary and Balearic Islands this shall mean those lines with the following voltages: 66 kV, 132 kV and 220 kV; on the Spanish peninsula this shall be limited to the assets of 220 kV.

In November 2004 Red Eléctrica reached an agreement for the purchase of the transmission assets of Enel Viesgo. On 15 February 2005 Red Eléctrica reached an agreement, formalised on 30 June 2005, with the CVC investment fund in order to purchase its 75% share in Redalta, a firm that controls the transmission assets that belonged to Iberdrola. This acquisition process has meant that Red Eléctrica currently owns 99% of the transmission grid on the Spanish mainland, with the transmission assets of Hidrocantábrico still to be purchased.

In November 2002, Red Eléctrica concluded agreements with Endesa and Unión Fenosa for the purchase of their respective transmission grids. In addition, Red Eléctrica acquired 25% of the share capital of Redalta, the firm through which the legal process involved in purchasing Iberdrola's transmission assets is being handled. The assets acquired from Endesa and Unión Fenosa amounted to 205 km of 400 kV lines and 6,851 km of 220 kV lines, in addition to 927 positions and approximately 4,500 MVA of transformation capacity.