Enel Chile S.A.

We had already factored into our ratings a gradual shift in the company's generation capacity to renewable technologies that's consistent with its controlling sponsor's sustainability program. The Chilean government and regulators worked on the plan with the electricity market participants, with a high level of coordination and consensus. The impact to cash flow generation will be limited, in our view, because the units only represent about 8% of Enel Chile's total capacity. We believe the effect on its EBITDA generation will likely be marginal at the time the plants are disconnected because, as noted above, Enel Chile is currently expanding into more efficient and profitable technologies and regulations will continue to evolve towards cleaner generation, which will limit the ability

...We expect Enel Chile will continue increasing its emission-free capacity between 2019 and 2021. According to the 2019-2021 strategic plan released in late 2018, Enel Chile will devote most of its $2.2 billion investments to increasing its renewable capacity, as it pursues a further shift in its energy matrix to a low-emission portfolio. More precisely, we expect the company will add around 1.1 gigawatts (GW) to its current renewable capacity in the mentioned time period, elevating the proportion of renewable energy in its portfolio to about 69% in late 2021 from the 63% posted in 2018. Its main relevant projects, currently ongoing, include 747 megawatt (MW) solar wind farms, 133 MW of wind-based power plants, and the finalization of a 150 MW run-of-the-river hydropower plant located in San Clemente. We expect Enel Chile to finance the capital expenditures (capex) for these projects with internally generated funds and existing cash, without needing to incur new debt, which should allow the...

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