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 that resulted in an increased contract base, declining debt levels and very high cash reserves. 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 mainly depended on natural gas imported from Argentina. However, the SING has been facing rising natural-gas supply shortages since 2004, when the Argentine government started
