Bolivia threatened a small payment -- or even no payment -- to Spain's Red Electrica after the leftist government of President Evo Morales nationalized the firm's local power grid.
The threat came as talks began between Spain's REE and the Morales administration over how much Bolivia should pay the company for taking over its assets.
"All nationalizations come with a small or tiny compensation, and certainly in our case that will happen -- or perhaps an evaluation says that we have to pay nothing," Vice President Alvaro Garcia told reporters here.
Garcia said the government will hire an outside company to determine the value of REE's Bolivian operations, known as Transportadora de Electricidad (TDE).
The company had been privatized in 2007, under the previous liberal government of Gonzalo Sanchez de Lozada.
The Spanish company denied charges from the Morales administration that it had failed to invest in Bolivia, saying it had poured in $88 million since 2002, when it bought the firm for $91 million.
Red Electrica Corp. valued TDE assets in 2005 at $225 million (170 million euros).
Garcia however said he had a report from a local evaluator that set the value of TDE at a mere $5 million.
After Garcia spoke, REE president Jose Folgado met in La Paz with Bolivian Hydrocarbons Minister Juan Jose Sosa for a first meeting on compensation payments.
The expropriation came just 15 days after Argentina's much larger nationalization of Spanish oil giant Repsol's YPF subsidiary, which triggered an outcry in Madrid.
It sparked fears that other populist Latin American governments, especially those facing elections, could follow, and led to a warning from Europe that world investment may be affected.