Iberdrola : Consummation of the sale by Scottish Power Generation Holdings Ltd. of 100% of the share capital of Scottish Power Generation Ltd. to Drax Group Plc.

Julián Martínez-Simancas

Secretary of the Board of Directors

Bilbao, 2 January 2019

To the National Securities Market Commission

Subject: Consummation of the transfer of the equity stake of Scottish Power Generation Holdings Ltd. in Scottish Power Generation Ltd.

Dear Sirs,

Pursuant to article 227 of the restated text of the Securities Market Law approved by the Royal Legislative

Decree 4/2015, of 23 October (texto refundido de la Ley del Mercado de Valores aprobado por el Real Decreto

Legislativo 4/2015, de 23 de octubre) and related provisions, we hereby inform you that on 31 December 2018, following satisfaction of the conditions precedent to which it was subject, Scottish Power Generation Holdings Ltd., consummated the sale of its entire equity stake in Scottish Power Generation Ltd. ("Scottish Power

Generation"), representing 100 % of its share capital, to Drax Smart Generation Holdco Ltd., entity belonging to the group of which Drax Group Plc. ("Drax Group") is the parent company, which was reported by way of relevant fact notice dated 16 October 2018 (registry number 270504) (the "Transaction").

The purchase price amounts to £702.0 million (approximately €777.6 million1) and is subject to adjustments customary in this type of transactions once the balance sheet of Scottish Power Generation as at 31

December 2018 is available, and to a mechanism for the sharing of risk and upside depending on the level of the capacity payments not received by Scottish Power Generation up to 30 September 2019.

The sale of Scottish Power Generation is framed within the €3.000 million assets rotation strategy announced in the Investors Day held in February 2018.

The impact of the Transaction in the consolidated results of the Iberdrola group for fiscal year 2018 will be quantified and announced in the following weeks once more information regarding the adjustments referred to above becomes available.

This information is provided to you for the appropriate purposes.

Yours faithfully,

Secretary of the Board of Directors

1

Calculated on the basis of the pound sterling / euro exchange rate as of 28 December 2018 published by theEuropean Central Bank.

NOTICE: This document is a translation of a duly approved Spanish-language document, and is provided for informational purposes only. In the event of any discrepancy between the text of this translation and the text of the original Spanish-language document which this translation is intended to reflect, the text of the original Spanish-language document shall prevail.

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IMPORTANT INFORMATION

This communication does not constitute an offer to purchase, sell or exchange or the solicitation of an offer to purchase, sell or exchange any securities. The shares of Iberdrola, S.A. may not be offered or sold in the United States of America except pursuant to an effective registration statement under the Securities Act or pursuant to a valid exemption from registration.

This communication contains forward-looking information and statements about Iberdrola, 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. 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. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. All oral or written forward-looking statements hereby made or otherwise attributable to Iberdrola, S.A. or any of its members, directors, officers, employees or any persons acting on its behalf are expressly qualified on its entirety by the cautionary statement above. All the forward-looking statements included herein are based on information available to Iberdrola, S.A. on the date hereof. Except as required by applicable law, Iberdrola, S.A. does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

NOTICE: This document is a translation of a duly approved Spanish-language document, and is provided for informational purposes only. In the event of any discrepancy between the text of this translation and the text of the original Spanish-language document which this translation is intended to reflect, the text of the original Spanish-language document shall prevail.

www.iberdrola.com

Take care of the environment.

Printed in black and white and only if necessary