The 'B+' ratings on Chilean thermal power generator Empresa Eléctrica del Norte Grande S.A. (Edelnor) reflect its operation in a very competitive market environment and its still-weak financial risk profile, which mainly results 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 on natural-gas-fired units) depends on natural gas availability. The need to burn coal or fuel
