IBERDROLA has sold its 15.68% stake in Irish hydrocarbons exploration and production Petroceltic International PLC to Mirabaud Pereire Nominees Limited, who in turn have carried out a prívate placement with a group of qualified and institutional investors.

The price was set at 16 pence per share, representing a total amount of £34.5 million (€39.2 million), 23% higher than the acquisition price in local currency. This was despite the fact that crude oil prices have fallen 45%, and underlines the success of exploration investments carried out by Petroceltic during this period.

Simultaneously with this sale, the Company has agreed to cancel its option on 49% of Petroceltic’s Isarene bloc in Algeria. IBERDROLA thereby recovers the $7.3 million (€5.1 million) it paid for the option. The two operations represent a total of €43.9 million for the Company.

IBERDROLA acquired its stake in Petroceltic in June 2008, investing in a company with exploration activities in Algeria, Italy and Tunisia. It simultaneously acquired an option on 49% of one of Petroceltic’s assets, and the Company recently selected the Isarene bloc in Algeria.

The sale of the 15.68% stake in Petroceltic falls within the framework of the divestment programme set in IBERDROLA’s 2008-2010 Strategic Plan, with the objective of maintaining the Group’s financial strength, optimising its capital structure and underpinning investment plans communicated to the markets.

The Petroceltic transaction follows the recent sale of gas storage assets at Senece Lake in the U.S. and divestments announced in 2009, among which are the stakes in the Sagunto and BBG regasification plants, two hydroelectricity plants in Chile, 10% of Gamesa and 27% of Guatemalan telecommunications company Navega.

IMPORTANT INFORMATION

This communication does not constitute an offer of purchase, sale or exchange or a request for an offer of purchase, sale or exchange of values. The shares of Iberdrola S.A. cannot be offered or sold in the United States, except if this is carried out through a declaration of effective notification of what is laid out in the Securities Act or under the protection of a valid exemption of the need for notification.