The ratings on Empresa Eléctrica del Norte Grande S.A. (Edelnor) mainly reflect its volatile cash flow generation and market environment in which the company operates (partly resulting from high natural gas shortages and volatile diesel oil prices). These weaknesses are mainly offset by Edelnor's diversified generation base (mainly coal and natural gas), adequate commercial strategy, expected stabilization of its cash flow generation in the 2008-2012 period and high cash reserves, which are expected to provide adequate protection to its financial obligations. 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 imported from Argentina. The SING has been facing rising natural-gas
