The ratings on Chilean thermal power generator Empresa Eléctrica del Norte Grande S.A. (Edelnor) mainly reflect the company's operation in a highly volatile market environment and its weak financial risk profile. These weaknesses are partly offset by Edelnor's diversified generation base (mainly coal and natural gas), ownership of transmission assets, and its 21% equity stake in the Gasoducto Norandino pipeline, which are all expected to provide adequate cash flow generation in the next three years. Edelnor operates in Chile's Northern Interconnected System (SING), where about 60% (or about 2,100 MW) of the nearly 3,600 MW of total installed generation capacity depends on natural gas, which is imported from Argentina. The SING has faced increasing natural gas supply shortages since 2004,
