During the Chairman´s annual meeting with employees

IGNACIO GALÁN GIVES OVERVIEW OF THE 2012 FINANCIAL YEAR FOR IBERDROLA GROUP EMPLOYEES

• The event was held via live multimedia connections with the Company’s main headquarters around the world
• The Chairman thanked all employees for their commitment to the IBERDROLA business project and their dedication in a difficult environment

IBERDROLA Chairman Ignacio Galán today gave thanks to Group employees for their commitment to the IBERDROLA business project and their hard work during the 2012 financial year, as well as their dedication in a difficult environment.

The Chairman addressed the Company’s employees from the Iberdrola Tower in Bilbao, the Company’s headquarters, with over 200 people present. The event was held simultaneously in five other cities in different countries through live satellite connections.

The Valencia (Spain), Glasgow (Scotland), Augusta (Maine, USA), Rio de Janeiro and Campinas (Brazil) offices held simultaneous meetings, with more than 700 professionals attending in person. Other IBERDROLA employees –nearly 30,000 in all- in dozens of countries, had the opportunity to connect online to this innovative interactive event.

This annual initiative provides direct contact between company employees everywhere and the Chairman, who answered questions by IBERDROLA employees in real time.

Addressing employees, Ignacio Galán stressed that the Group has laid the foundations for the next phase of economic growth, reflected in its 2012-2014 outlook, presented in London last October.

The Company's strategy is based on consolidating its financial strength by moderating investments, mainly focusing on networks and renewable energy businesses, as well as divesting assets in non-strategic countries and implementing improvements in energy efficiency.

In 2012, IBERDROLA achieved its targets and has completed divestments amounting to €850 million, almost half of that expected for the three-year period. All this was accomplished "despite the adverse economic and regulatory environment, especially in Spain," noted Galán.

Projects for 2013

During the event, Galán also discussed projects to be carried out in 2013.  In Spain, highlights here included the completion of the new 800 MW La Muela hydroelectric pumping station with 800 MW in Valencia and the beginning of the expansion of the San Pedro plant in Orense.

In the UK, the Chairman singled out construction of the first subsea line between Scotland and England spanning a total of 420 kilometers, the 136 MW  Harestanes wind farm and the 400 MW West of Duddon Sands offshore wind farm, the biggest project ever of this type by the Group. Elsewhere, he noted the planned construction start for ScottishPower’s new headquarters in Glasgow.

In the US, the Company will continue work on the 800 km high-voltage power line in Maine, of which more than 50% has already been completed.

For Brazil, Ignacio Galán highlighted Elektro´s integration in the Group, which will maximize synergies and improve efficiency. The main projects in this country include the construction of large hydroelectric facilities, such as the 1,820 MW Teles Pires plant and the 350 MW Baixo Iguaçu plant, as well as wind farms.

Galán also highlighted IBERDROLA´s commitment to its employees and the environment, which are in line with the values of transparency, ethics, innovation and respect for the environment that shape the Company. In this respect, he stressed a focus on innovative projects which has led the Company to head the European Commission’s R+D+i ranking for European utilities.

IBERDROLA also achieved the highest score of the Dow Jones Sustainability Index and has become the leading company in its sector, with a level of emissions 30% lower than the average for European utilities and more than half of its output emission-free.

In addition, IBERDROLA will maintain the social policies which have been in place for years now, employing advanced work-life balance and committing to ensure its workforce continues to receive the best training.

As part of the its commitment to society, 800 young people have had the opportunity to receive practical training at the company through scholarships and apprenticeships and more than 100 have completed postgraduate studies at British, Spanish and American universities sponsored by the IBERDROLA Foundation.