• The authorities of the state of Hessen have issued the prior resolution and the permits for water intake and discharge for the first traditional electricity generation plant of the Company in this country
• The objective of the Company, reflected in the Strategic Plan 2008-2010, is to continue to reinforce its international expansion
• IBERDROLA’s power plant, which will have 1,100 MW of installed power, adds to the other combined cycle power plant that the Company is developing in Lauchhammer

IBERDROLA has obtained the initial permits and licences for constructing its first combined cycle power plant in Germany, which will be located in the town of Ludwigsau and will have some 1,100 megawatts (MW) of installed power.

The authorities of the state of Hessen have issued the prior resolution and the permits for water intake and discharge for the Company’s first traditional electricity generation plant in this country, which represents a noteworthy milestone in the development of this project, as it reaffirms its technical viability.

The objective of the Company is to strengthen its presence in Germany, where, apart from the plant at Ludwigsau, it is developing another combined cycle plant of 1,100 MW in Lauchhammer, in the state of Brandenburg. Last July, IBERDROLA submitted the prior resolution request to the state authorities and the decision is expected in early 2009.

The development of these locations complements the significant presence of IBERDROLA in the wholesale markets of electricity and gas in Germany. The Company has been involved in the German wholesale electricity market since 2001, carrying out operations within the country and in interconnections with neighbouring countries, both in the trading of energy and capacities, as well as the delivery of energy profiles to system operators, and local and distribution network operators.

IBERDROLA, which plans to progressively increase its presence in the European energy markets within the framework of international expansion as laid out in the Strategic Plan 2008-2010, is adding to the German projects the combined cycle power plant at Figueira da Foz, in Portugal, which will have an installed power of 850 MW.

Along these lines, the trading activities that the Company is carrying out in Spain, France, Germany, Italy, Holland, Belgium, Austria, Portugal, Switzerland and Greece, are a key element for detecting and developing new business opportunities.

Better generating capacity

IBERDROLA has continued to diversify and expand its generating network throughout the world during the first half of 2008. The Company has reached an installed capacity of 40,822 megawatts (MW), 3.7% more than in the same period of 2007. By technologies, the combined cycles represent 31.2% of the total power; hydraulic power represents 23.8%; renewables represent 19.5%; thermal power represents 11.5%; nuclear power represents 8.2%; fuel oil represents 4.4%, and cogeneration represents 1.4%.

The focus of the Company to grow in basic energy trade through generating plants that are respectful of the environment, which has lead it to become a key actor in the fight against climate change, will continue in the coming years, with the opening of more renewable installations, combined cycle plants and hydroelectrical plants capable of meeting demand, both in Spain and abroad.

IMPORTANT INFORMATION

This information does not constitute an offer to buy, sell or exchange, nor does it constitute the solicitation of an offer to buy, sell or exchange securities. Iberdrola, S.A. shares may not be offered for sale or sold in the United States except through a statement of effective notification in conformity with the provisions of the Securities Act or when a valid exemption from the obligation to provide such notification has been granted.