The European Union condemned Bolivia's decision to take control of a subsidiary of Spanish firm Red Electrica on Wednesday and urged for quick and adequate compensation for the move.

"The European Commission is concerned by the Bolivian government's decision to nationalise the Empresa Transportadora de Electricidad (TdE), owned by Red Electrica Internacional," said the EU executive arm's trade spokesman John Clancy.

"Actions like this one necessarily send a negative signal to international investors over the business and investment climate in Bolivia," he said in a statement, adding that Brussels was closely monitoring the situation.

"We trust the Bolivian authorities will fully uphold their investment agreements with Spain and ensure prompt and adequate compensation for this expropriation."

The announcement by Bolivian President Evo Morales was the second blow to corporate Spain in just 15 days, coming after Argentina's much larger expropriation of oil giant Repsol's YPF subsidiary.