The Board of Directors of IBERDROLA, meeting today for the first time in the new Iberdrola Tower in Bilbao, considered a new phase in the Iberdrola Flexible Dividend plan for shareholder remuneration with respect to what would have been the customary interim dividend payment for 2011. The proposal will be submitted for Board approval at its meeting in November.

If approved, IBERDROLA will again offer shareholders the option of receiving shares in the Company at no cost and with no fiscal retention, and which will start trading at the end of January 2012.

The Iberdrola Flexible Dividend plan also offers shareholders the option of taking cash for each free subscription right. In this case, shareholders can sell their subscription rights to IBERDROLA under the commitment the Company has to buy at a gross price which, on the basis of today’s share capital and current market conditions, would amount to at least €0.143 per share. This amount would be tax deductible.

Shareholders will also have to option to sell their subscription rights in the market, with no fiscal retention but with no price guarantee.

In the event the proposal is approved, IBERDROLA will continue with its shareholder remuneration policy which between 2000 and 2010 has led to it distributing dividends and dividend equivalents totalling €10,068 million and whose total return for shareholders stood at 143% for the period.

The calendar established for this new distribution under the Iberdrola Flexible Dividend plan, subject to Board approval is: