The Board approves initial preparations to carry out the operation in the last quarter of this year

IBERDROLA TO LIST SHARES IN 20% OF ITS RENEWABLE ENERGY SUBSIDIARY THROUGH INCREASE IN CAPITAL

• IBERENOVA will thus obtain financing for future growth and development without affecting financial strength of the IBERDROLA group, thus meeting one of its key strategic objectives
   
• The Company will first restructure this business area, incorporating all renewable energy-related IBERDROLA and ScottishPower units in its IBERENOVA subsidiary
   
• Following the ScottishPower operation, the IBERDROLA group has more than 6,500 MW in operative renewable energy capacity, and a pipeline of almost 38,000 MW

The Board of IBERDROLA today approved plans to sell up to 20% of shares in its renewable energy subsidiary IBERDROLA Energías Renovables (IBERENOVA) through a capital increase to be followed by an Initial Public Share Offer (IPO) to take place in the final quarter of this year.

Meeting at the Villarino hydroelectric plant in Salamanca, the IBERDROLA Board approved initial preparations for the public share offer by this subsidiary, and also authorized a prior reorganization of this business area with the goal of incorporating all renewable-energy related susbidiaries of IBERDROLA and ScottishPower companies in IBERENOVA.

The decision is fully consistent with IBERDROLA’s growth model, which aims to consolidate leadership in the wind energy sector, in the framework of its commitment to defending the environment and sustainable development, while conserving financial strength.

The listing of up to 20% of IBERENOVA will give the subsidiary increased visibility in the the markets and provide resources to finance growth, without affecting the financial strength of the IBERDROLA group, one of its key strategic priorities.

The IBERDROLA group currently has an operational renewable energy capacity of 6,562 megawatts (MW). In addition to the more than 4,500 MW in IBERDROLA capacity at the end of the first quarter, the Company in April incorporated more than 2,000 MW mostly from ScottishPower and its U.S. unit PPM.

IBERDROLA also has a project pipeline worldwide of approximately 38,000 MW: around 6,000 MW is in Spain and a similar amount in the UK, nearly 5,400 MW in the rest of the Europe, more than 19,200 MW in the U.S., 400 MW in Latin America and 500 MW in the rest of the world.