The 'B+' ratings on Chilean thermal power generator Empresa Eléctrica del Norte Grande S.A. (Edelnor) reflect the operation in a very competitive market environment and its still weak financial profile, which mainly derives from its volatile cash flow and weak financial flexibility. These weaknesses are partly offset by Edelnor's diversified generation base (mainly natural gas and coal), ownership of transmission assets, and its 21% equity stake in the Gasoducto Norandino pipeline, which somewhat mitigate the company's high cash flow volatility. Edelnor operates in Chile's Northern Interconnected System (SING) system, where about 40% of the nearly 2,600 MW of installed generating capacity (considering dispatch restrictions imposed to natural gas-fired units) depends on the availability of natural gas. The need to burn
