IBERDROLA chairman Ignacio Galán yesterday met in Madrid with Qatar’s Deputy Prime Minister and Minister of Energy and Industry, Abdulla Bin Hamad Al-Attiya, and informed him of the Company’s interest in continued participation in Qatar’s energy development.

Galán said that IBERDROLA’s desire is to continue to be involved in business opportunities that arise in Qatar’s gas and electricity sectors. He also informed the minister of progress in construction work at the largest combined cycle plant in the Middle East, located at the Qatari town of Mesaieed. The project was awarded to IBERDROLA’s engineering subsidiary in November 2006 at a cost of more than US$1.63 billion.

Construction work at the plant, which will have six gas turbines and three steam turbines for an installed capacity of 2,000 MW, is proceeding well. Earth movement is advanced and pile foundations for the power blocks have been completed, with the first two gas turbines expected by mid-September.

The new plant will be capable of supplying the entire population of Qatar, totalling 900,000, accounting for a 55.5% increase in installed capacity in the peninsular from the current 3,600 MW.

The contract was awarded to IBERDROLA by Marubeni of Japan, which won an international tender called by Kahramaa (Qatar General Electricity & Water Corporation), in which Tractebel of Belgium and Britain’s International Power also took part.

The Qatari power station will be put into service in various stages: the first 1,000MW in power will come on stream in the Summer of 2008, rising to 1,600MW in early 2009, and in April 2010 the plant will reach its full capacity of 2,000MW.

This contract was the largest ever awarded to a Spanish company in an Arab country and the second obtained by IBERDROLA Ingeniería y Construcción in the Persian Gulf, following the award also in 2006 of another in the United Arab Emirates to build a 225MW open cycle plant for US$144 million. These two contracts were facilitated by the opening of a commercial office in Doha (Qatar) in September 2004.

_________________________________________________

IMPORTANT INFORMATION

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