La Paz, May 2 (IANS/EFE): Bolivian President Evo Morales announced Tuesday the nationalization of an electricity distributor owned by Spanish utility REE.

"Again on this day, as just tribute to the workers and to the Bolivian people who have struggled for the recovery of natural resources and basic services, we nationalize Transportadora de Electricidad," the leftist head of state said during a May Day event at the presidential palace.

REE's 99.94 percent stake in Transportadora de Electricidad will pass to state-owned Empresa Nacional de Electricidad, Morales said, justifying the nationalization by pointing to what he described as the Spanish company's inadequate investment in its Bolivian operations.

He then asked Bolivia's armed force chief, Gen. Tito Gandarillas, to effect "the corresponding takeover of the facilities of administration and operation of TDE".

TDE owns and operates the main Bolivian power grid, which supplies 85 percent of the domestic market for electricity.

La Paz nationalized four electricity producers in 2010, including subsidiaries of French giant GDF Suez and Britain's Rurelec.

REE management issued a statement expressing regret and surprise over the expropriation and vowing to seek adequate compensation from the Bolivian government.

The Spanish government contacted Bolivian authorities after learning of the nationalization, official sources in Madrid told EFE.