Following approval at the Annual General Shareholders Meeting of the Company, held on March 29

IBERDROLA BOARD GIVES GO-AHEAD FOR FOUR FOR ONE SHARE SPLIT

• The new shares, whith nominal value reduced from current 3 euros to 0.75 euros, will commence trading on Monday, October 8
• IBERDROLA, whose total share capital will not change, aims through this operation to offer more liquidity and trading opportunities to the stock, as well as facilitate fidelity programmes for investors

The Board of Directors of Iberdrola, at its meeting held today in Bilbao, has approved the implementation of a four for one split, reducing the nominal value of each share from 3 euros to 0.75 euros. The share split was first approved at the Annual General Shareholders Meeting last March 29.

With this split, which IBERDROLA previously announced would be implemented once the acquisition of Scottish Power was completed, is in line with the increasing market capitalisation of the Company over the last years. The number of outstanding shares will be multiplied by four, from 1,248,435,510 to 4,993,742,040, although the share capital amount will remain at 3,745,306,530 euros.

Following the agreement adopted at today´s regular board meeting, and once the appropriate administrative steps are completed, the new shares are expected to start trading next Monday October 8th. The transaction will not imply any cost for shareholders.

The objective of the share split, common practice among the major IBEX-35 companies in past years, is fundamentally to offer greater liquidity and trading opportunities, as well as facilitate fidelity programmes for investors (such as the Dividend Reinvestment Programme, started by the Company in 2006).

IMPORTANT INFORMATION

This communication does not constitute an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities. The shares of Iberdrola, S.A. may not be offered or sold in the United States of America except according to an effective registration statement under the Securities Act or according to a valid exemption from registration.