The ratings on Empresa Electrica del Norte Grande S.A. (Edelnor) reflect a still-weak financial profile and the cash flow volatility derived from projected volatile spot prices in the Chile's Northern Interconnected System (SING) system. These weaknesses are offset by Edelnor's diversified generation base, ownership of transmission assets (a competitive advantage), and its 21% equity stake in the Gasoducto Norandino pipeline, which provides a stable cash flow stream. Edelnor operates in the SING, where about 40% of the nearly 2,600 MW of generation installed depends on natural gas (considering dispatch restrictions to natural gas-fired units). The need to burn coal or fuel oil as a result of natural gas supply shortages to gas-fired power plants and the system's oversupply when natural
