Julian Martínez-Simancas is named new Secretary to the Board of Iberdrola

NEW IBERDROLA SHARES START TRADING TOMORROW

The shares have been issued to fulfil the terms of the recommended offer for ScottishPower

• In the context of the transaction, today’s Board meeting of IBERDROLA has approved an issue of loan notes with a total nominal value of £97 million (€143.2 million)


• The operation has been favourably received by the markets: between 27 November 2006 and 23 April 2007, IBERDROLA and ScottishPower shares have revalued 14.1% and 9.1% respectively, creating more than €4 billion in value

Tomorrow, the 245,225,982 new shares of IBERDROLA, issued in the context of the capital increase required to meet the terms of the recommended offer for ScottishPower, will commence trading on the Spanish continuous market at 9am local time. This follows final approval of the transaction by the Court of Session in Edinburgh.

The new IBERDROLA shares have a nominal value of €3 and a paid-in surplus of  €29.75, and make up 21.4% of the new share capital of the Company. This amounts to 1,146,775,163 shares, following the increase.

According to the terms of the offer, valued at €17.1 billion, IBERDROLA acquires 100% of ScottishPower ordinary shares. Payment is approximately 52.3% in cash or loan notes (or a combination of the two) and the remaining 47.7% (approximately) in IBERDROLA shares. For this purpose, the Board of IBERDROLA today approved the issue of loan notes with a total nominal value of more than £97 million (€143.2 million).

The operation has been favourably received by the markets since its announcement, reflected in the creation of more than €4 billion in value: between 27 November 2006 and April 23 this year, shares in IBERDROLA and ScottishPower* have appreciated by 14.1.% and 9.1% respectively.

The Board also ratified Xabier de Irala as a member of the executive committee, on recommendation of the appointments and remuneration committee. The executive committee thus maintains its current composition: Ignacio Galán, Juan Luis Arregui, Victor de Urrutia, José Ignacio Berroeta and De Irala.

The Board meeting also named IBERDROLA Secretary-General Julian Martinez-Simancas as new Secretary of the Board, replacing Federico Sebastián Flechoso, who has resigned in anticipation of attaining retirement age in the next few days.

* ScottishPower shares ceased trading at the close of markets on April 19

The Board acknowledged San Sebastian’s extraordinary contribution as Secretary to the Board. He will continue as a legal advisor to the Board, and as Secretary of the Appointments and Remuneration Committee.

Martinez-Simancas is a State Attorney with broad experience in the private sector. He joined IBERDROLA in 2002 and since then has occupied the posts of Director-Deputy to the Executive Vice-Chairman and Chief Executive, Deputy Secretary to the Board, and Secretary-General, a post that he will now combine with that of Secretary to the Board.

The Board also approved a new text of Procedures regarding Conflicts of Interest Relating to Directors, Major Shareholders and Senior Management.

Birth of a new world energy giant

The integration of IBERDROLA and ScottishPower, following completion of the friendly transaction valued at €17.1 billion and announced in November 2006, is a milestone in the 100-year history of the Company. A world energy leader is created, leader in renewable energy and an enterprise value of more than €65 billion.

The combined group has a total installed capacity of around 40,000 megawatts (MW) compared with the 30,500 MW of IBERDROLA alone (a rise of 28%). Of this new capacity, 32,500 MW relates to conventional generation, an increase of 25% over IBERDROLA’s current level.

The new integrated group will consolidate IBERDROLA’s world leadership in renewable energy – including large-scale hydroelectric power – with an installed capacity of 16,500 MW that in the coming years the Company expects to exceed 20,000 MW.

The combination of IBERDROLA and ScottishPower will at the same time reinforce the group’s world leadership in wind power, adding the almost 2,000 MW of ScottishPower capacity, mostly from its PPM subsidiary in the United States to the close to 5,000 MW of IBERDROLA, an increase of 40%.

The new Group has a significantly larger consumer base, with the 5.3 million of ScottishPower adding to the 18.4 million of IBERDROLA to total 21.7 million in Europe and the Americas.

At present, the Company has 2.7 billion cubic metres of gas storage capacity in the UK and the United States, with significant expansion potential.

The geographical footprint of IBERDROLA and ScottishPower is now of significant proportions, creating an Atlantic platform. It has operations in Spain, the UK, the United States, Mexico, Brazil, Greece, Portugal, France, Germany, Italy, Poland, Guatemala, Bolivia and Chile. The group also has a substantial project pipeline that will enable it to continue growing in the future.

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 except pursuant to an effective registration statement under the Securities Act or pursuant to a valid exemption from registration.