IBERDROLA today completed the sale of three natural gas distribution companies in Connecticut and Massachusetts to UIL Holdings Corporation, a transaction valued at $1.3 billion.

The sale of the three subsidiaries - Connecticut Natural Gas (CNG), Southern Connecticut Gas (SCG) and Berkshire Gas Company (BGC) - was announced in May and closed today having obtained all the required regulatory approvals.

The companies distribute approximately 1.6 billion cubic meters of natural gas per year to nearly 369,000 customers in the states of Connecticut and Massachusetts, and have a combined workforce of approximately 800.

The sale is part of IBERDROLA’s strategy to maintain the financial strength of the Group, optimise its capital structure and deliver the rhythm of investment pledged to the markets.

The operation follows others announced in 2010 by IBERDROLA including the sale of the Seneca Lake gas storage facility in the US, 15.68% of Petroceltic International PLC, 2.7% of EDP and of its subsidiaries in Guatemala.

The amount will be assigned to finance the major infrastructure project that the Company is building in Maine, known as the Maine Power Reliability Program (MPRP).

This project, benefitting electricity distribution in Massachusetts, New Hampshire and Maine, and the interconnection between Maine and Canada, involves an investment of around $1.4 billion and will consist of around 500 miles of new and upgraded electricity transmission lines that will cross 75 towns and villages.

Preparatory work for construction at the project began in June with final completion anticipated in 2015. The transmission line upgrade will provide the state of Maine with interconnection capability for new renewable energy capacity, and assist it in reducing its dependence on imported energy.

The project will support the development of new renewable energy resources and help ensure long-term reliability for customers by increasing the capacity and efficiency of New England transmission grid. The MPRP, which will be completed in 2015, will support an average of 2,000 jobs annually during the five-year construction phase, with a peak of over 3,000, and contribute significantly to the Maine economy. The project is the largest energy infrastructure project in the state’s history, and the first upgrade of its electricity grid in 40 years.

The Maine project is consistent with two of the Group’s main strategic objectives, those of a progressively more international business profile and of providing improved quality of service in its operating markets by upgrading and expanding transmission and distribution networks.

IMPORTANT INFORMATION

This announcement is not an offer for sale of securities in the United States, nor in any other jurisdiction. The securities referred to herein may not be sold in the United States absent registration or an exemption from registration under the US Securities Act of 1933, as amended.

FORWARD-LOOKING STATEMENTS

This communication contains forward-looking information and statements about IBERDROLA S.A. and its subsidiary IBERDROLA RENOVABLES, S:A:, including financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, capital expenditures, synergies, products and services, and statements regarding future performance. Forward-looking statements are statements that are not historical facts and are generally identified by the words “expects,” “anticipates,” “believes,” “intends,” “estimates” and similar expressions.

Although IBERDROLA, S.A. believes that the expectations reflected in such forward-looking statements are reasonable, investors and holders of IBERDROLA, S.A. shares are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of IBERDROLA, S.A., that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include those discussed or identified in the public documents sent by IBERDROLA, S.A. and IBERDROLA RENOVABLES, S.A. to the Comisión Nacional del Mercado de Valores.

Forward-looking statements are not guarantees of future performance. They have not been reviewed by the auditors of IBERDROLA, S.A. and IBERDROLA RENOVABLES, S.A. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. All subsequent oral or written forward-looking statements attributable to IBERDROLA, S.A., or any of its members, directors, officers, employees or any persons acting on its behalf are expressly qualified in their entirety by the cautionary statement above. All forward looking statements included herein are based on information available on the date hereof. Except as required by applicable law, IBERDROLA, S.A. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.