The Chilean governmentalGovernmental authorities may also delay the distribution tariff review process, or tariff adjustments may be insufficient to pass through all of our costs.costs to customers.  Some aspects of the Chilean electricity law date back to 1982, and could very well experience significant regulatory changes. The government has mentioned the potential introduction of electricity distribution tariff reform, and it possible that such new regulation may adversely affect our future profitability. Similarly, electricity regulations issued by governmental authorities in Chile may affect the ability of our generation companies to collect revenues sufficient to offsetcover their operating costs.

The inability

Environmental regulations for existing and future generation capacity have become stricter and require increased capital investments.  Any delay in meeting the standards constitutes a violation of any companythe regulations.  Failure to certify the original implementation and ongoing emission standard requirements of such monitoring system may result in our consolidated groupsignificant penalties and sanctions or legal claims for damages.  We expect that even more restrictive emission limits will be established in the future.  We are also subject to collect revenues sufficient to cover operating costs may affect the ability of that company to operate as a going concern and may otherwise have an adverse effectannual green tax, based on our business, financial resultsgreenhouse gas emissions in the previous year, and operations.such taxes may increase in the future, and discourage thermal electricity generation.

In addition, changes

Changes in the regulatory framework are often submitted to the legislators and administrative authorities and, some of these changes could have a material adverse impact on our business, results of operations and financial condition. For instance, in 2005 there was a change in the water rights law in Chile that requires us to pay for unused water rights, increasing the annual cost to maintain unused water rights for hydroelectric projects  that are neither economically nor technically feasible. In August 2016, Enel Generación Chile waived its unused water rights and recorded a write-off of Ch$ 35.4 billion.

Regulatory authorities may impose fines on our subsidiaries due to operational failures or any breachbreaches of regulations.

Our electricity businesses may beare subject to regulatory fines for any breach of current regulations, including energy supply failures.

In Chile, such  Such fines may be imposed for a maximum of 10,000 Annual Tax Units (“UTA” in its Spanish acronym), or Ch$ 5.55.8 billion using the UTA as of December 31, 2016.2018. Our electricity generation subsidiaries are supervised by local regulatory entitiesauthorities and may beare subject to these fines in cases where, in the opinion of the regulatory entity,authority, operational failures affecting the regular energy supply to the system, including coordination issues, are the fault of the company such as when agents are not coordinated with the system operator. In addition, the new transmission law establishesgenerator. Regulations establish a compensation fee to end customers when the energy supply is interrupted more than the standard allowed time. The compensationtime due to events or failures affecting transmission facilities. Compensation is a proportion of the energy not supplied with a minimum value between 20,000 UTA (Ch$ 11.111.6 billion) and the previous year'syear’s energy sales revenues in the case of generators. Fines may also be associated with breach of regulations.

In 2015, the CDEC-SING audited GasAtacama Chile’sGasAtacama’s thermal power plant and reported its findings to the Superintendence of Electricity and Fuels (“SEF”).  In, which in August 2016 the SEF fined GasAtacama Chile Ch$ 5.5 billion10,000 UTA (Ch$ 5.8 billion) for allegedly providing inaccurate information to the CDEC-SING relatedCDEC-SING. In 2017, Gener and Engie, both competitors, demanded that Enel Generation pay US$ 65.8 million and US$ 160 million, respectively, as compensation for the alleged additional costs attributed to certain technical operating parameters that implied higher operating costs toGasAtacama in the system. These costs were associated with the technical minimum capacity reported by GasAtacama at 310 MW, with a 30-hour minimum operating time that the CEN later estimated to be only 118 MW and a 2-hour minimum operating time. Further compensation claims from other market players may arise in the future and further fines to any of our plants could adversely affect our business, results of operations and financial condition.

As of December 31, 2016,

In 2017, Enel Distribución Chile had five unresolved fines imposedwas fined by the SEF for a total amount of Ch$ 1.8 billion, mainly160,000 UTM (Ch$ 7.7 billion) due to regulatoryvarious claims of infractions related to extreme inclement weather in June and July 2017.  During 2017, Enel Distribución was also fined for a total amount of 35,611 UTM (Ch$ 1.7 billion) associated with breaches in relation to theof quality and continuitystandards of service during previous years and failures in two substations. Those penalties have not been paid yet, since they were appealed before the electricity authority and courts of justice.supply.  For further information on fines, please refer to Note 3536.3 of the Notes to our consolidated financial statements.

We depend on payments from our subsidiaries and jointly-controlled entities to meet our payment obligations.

In order to pay our obligations, we rely on cash from dividends, loans, interest payments, capital reductions and other distributions from our subsidiaries.  The ability of our subsidiaries to pay dividends, interestSuch payments loans and other distributions to us isare subject to legal constraints such as dividend restrictions and fiduciary duties and contractual limitations that may be imposed by local authorities.obligations.

Dividend Limits and Other Legal Restrictions. The ability of any of our subsidiaries that are not wholly-owned to distribute cash to us may be limited by the directors’ fiduciary duties of such subsidiaries to their minority shareholders. Furthermore, some of our subsidiaries may be forced by law, in accordance with applicable regulation, to diminish or eliminate dividend payments. As a consequence of such restrictions, our subsidiaries could, under certain circumstances, be impeded from distributing cash to us.

Contractual Constraints.  Distribution restrictions included in certain credit agreements of our subsidiaries may prevent dividends and other distributions to shareholders if they are not in compliance with certain financial ratios.  Generally, ourOur credit agreements typically prohibit any type of distribution if there is an ongoing default.

Operating Results of Our Subsidiaries.  The ability of our subsidiaries to pay dividends or make loan payments or other distributions to us is limited by their operating results.  To the extent that the cash requirements of any of our subsidiaries exceed their available cash, the subsidiary will not be able to make cash available to us.

Any of the situations described above could adversely affect our business, results of operations and financial condition.

We are involved in litigation proceedings.

We are currently involved in various litigation proceedings, which could result in unfavorable decisions or financial penalties against us.  We will continue to be subject to future litigation proceedings, which could cause material adverse consequences to our business.

Our financial condition or results of operations could be adversely affected if we are unsuccessful in defending lawsuits and proceedings against us.  For further information on litigation proceedings, please see “Item 8. Financial Information — A. Consolidated Statements and Other Financial Information — Legal Proceedings” and Note 33.336.3 of the Notes to our consolidated financial statements.

Environmental regulations

Construction and other factorsoperation of power plants may causeencounter significant delays impede the developmentor halt and cost over-runs as well as stakeholder opposition that may damage our reputation and result in impairment of new projects, or increase the costs of operations and capital expenditures.our goodwill with stakeholders.

Our operating subsidiaries are subject to environmental regulations which, among other things, require us to perform environmental impact studies for futurepower plant projects and obtain permits from both local and national regulators. The approval of these environmental impact studies may be withheld by governmental authoritiesdelayed in obtaining regulatory approvals, or may face shortages and therefore their processing time may be longer than expected.

The projects that require consultation with local stakeholdersincreases in their evaluation process may be rejectedthe price of equipment, materials or their development may be impeded or slowed down. Our stakeholders may also seek injunctive or other relief, which could negatively impact us iflabor, and they are successful. Moreover, projects that do not require consultation with local stakeholders may be subject to intervention or suffer continuous resistance, delaying their approval process or development.  construction delays, strikes, adverse weather conditions, natural disasters, civil unrest, accidents, and human error.  Any such event could adversely impact our business, results of operations and financial condition.

Environmental regulations for existing

Market conditions at the time when the projects are initially approved may differ significantly from those that prevail when the projects are completed, which in some cases make such projects commercially unfeasible.  This has been the case with many of our former projects, which were initially planned under very different market conditions with higher energy prices prevailing in the market and future generation capacity may become stricter, requiring increased capital investments. For example, Decree13/2011less competition.  Deviations in these assumptions, including the estimates of the Chilean Ministry of the Environment, published in June 2011, established stricter emission standards for existing thermoelectric plants that were requiredtiming and expenditures related to be met between 2014these projects, may lead to cost over-runs and 2016, and stricter standards for new facilities or additional capacity. This regulation also required the establishment of a system of continuous emission monitoring, pursuant to which thermoelectric plants must implement a monitoring system in accordance with the guidelines and protocols issued by the Chilean Superintendence of the Environment. In compliance with these Chilean environmental regulations, all thermal plants made incremental investments to comply with the new regulations by installing abatement systems to control pollutant emissions. For example, we are improvingcompletion time widely exceeding our Tarapacá thermal plant through the installation of a desulphurizer to reduce sulfur oxide (SO2) and implementation of measures to improve combustion to reduce emissions of nitrogen oxide (NOx). As of December 31, 2016, the amount accrued in connection with such investments was Ch$ 65,718 million.

Any delay in meeting the standards constitutes a violation of the regulations which established emission limits effective June 23, 2015 or June 23, 2016 depending on the plant’s location and failure to certify the implementation of such monitoring system may result in penalties and sanctions. In addition, any deviation from the environmental license to operate could result in severe sanctions from authorities.

In addition, any deviation from the environmental license to operate could imply severe sanctions from authorities. For example, during 2016 Enel Generación Chile paid fines of Ch$ 1.1 billion for non-compliance with the requirements underthe environmental licenses and failing to send the monitoring reports for our Bocamina, Huasco and Diego de Almagro thermal plants in past years.

Currently, the Chilean Ministry of Environment is working on new prevention and decontamination plans in polluted areas and the Chilean Ministry of Energy is also  preparing new mitigation plans to reduce carbon dioxide emissions and comply with the Paris Agreement under the United Nations Framework Convention on Climate Change. Such plans may modify Decree 13/2011 and even further restrict the emission standards for thermoelectric plants, which in turn may require additional investments in the future.

In September 2014, the Chilean government enacted Law 20,780, a tax reform law, which will come into effect in 2018, and thereby established an annual tax on stationary power generators, such as thermal generators, based on their emission of pollutants for the previous year. In December 2016, the Chilean Ministry of Environment published the list of thermal generators that are affected by this tax, and the list included all of our thermal plants.  These plants will have to report their emissions during 2017 and will have an additional tax liability in 2018. It is possible that the tax expense might increase in the future, discouraging thermal generation given the increasing cost of operation.

In December 2016, our subsidiary Enel Generación Chile recorded a write-off of Ch$ 1.1 billion for the Tames 2 and Totoralillo thermal projects, due to their technology (steam turbine/coal), which is becoming more expensive because of stricter regulation and its uncertain profitability, among other reasons.

We may have to incur additional costs to remediate and implement our asbestos control and sanitation policy, or be subject to legal actions against us,initial estimates, which in turn may have a material adverse effect on our business, results of operation and financial condition.

In addition

The locations where we develop projects are sometimes highly challenging in terms of geographical topography, in some cases in mountain slopes with very limited access. These factors may also lead to environmental considerations,delays and cost overruns. For example, Cerro Pabellón, our 48 MW geothermal plant, was built at 4,500 meters above sea level and currently we are constructing a third unit that will increase its capacity by 33MW. We may face challenges associated with high altitude construction, including health concerns, and these may affect the construction schedule and associated investment. Additionally, given the geographic location of some projects, there are other factors thatarchaeological risks. In 2018, 11 charges related to archaeological issues were brought against us in connection with Cerro Pabellón, of which three are considered material. They could lead to fines of up to 5,000 UTM (approximately US$ 241,765), a revocation of the Environmental Qualifications Resolution (“RCA” in its Spanish acronym) and even the shutdown of the plant. The claims result from not having implemented adequate and timely preventive measures associated with archaeological sites discovered in the grounds.

The operation of our coal-fired thermal power plants may adversely affect our abilitygoodwill with stakeholders, due to build new facilities or to complete projects currently under development on time, including delays in obtaining regulatory approvals, shortages or increases in the price of equipment, materials or labor, construction delays, strikes, adverse weather conditions, natural disasters, civil unrest, accidents, or other unforeseen events. For example, many of our power plants have been delayed by years in relation to their original planning and desing. Any such event could adversely impact our results of operations and financial condition.

Delays or modifications to any proposed project and laws or regulations may change or be interpreted in a manner thatgreenhouse gas emissions, which could adversely affect our operationsthe environment and local residents. In addition, communities might have their own interests and different perceptions of the company, influenced by other stakeholders or our plans for companies in which we hold investments,motivations unrelated to the project. If the company fails to engage with its relevant stakeholders, it may face opposition, which could adversely affect our business, results ofreputation, stall operations and financial condition.

Our business may be adversely affected by judicial decisions on environmental qualification resolutions for electricity projects in Chile.

The amount of time necessaryor lead to obtain an environmental qualification resolution for electricity generationlitigation threats or transmission projects in Chile has materially increased, primarily due to judicial decisions against such projects, environmental opposition, social criticism and government delays. This can cast doubt on the ability of a project to obtain such approval and increase the uncertainty for investing in electricity generation and transmission projects in Chile. The uncertainty is forcing companies to reassess their business strategies.

Our power plant projects may encounter significant opposition from different groups that may delay their development, increase costs, damage our reputation and potentially result in impairment of our goodwill with stakeholders.

action. Our reputation is the foundation of our relationship with key stakeholders.  If we are unable to effectively manage real or perceived issues that could impact us negatively, our business, results of operations and financial condition could be adversely affected.

In 2015, the Chilean Ministry of Environment enacted Law 20,500, setting the procedures for stakeholder participation in the preliminary phase of the evaluation process to avoid risk of conflict and minimize the project impacts. Plants built before the adoption of these rules that were not submitted to local consultation may face opposition from several stakeholders, such as ethnic groups,

environmental groups, land owners, farmers, local communities and political parties, among others, any of whom may impact the sponsoring company’s reputation and goodwill.  For example, since December 2013, the Bocamina II power plant has encountered substantial opposition from local fishermen’s unions that claim that our facility negatively affects marine life and causes pollution, which resulted in the interruption of the operation of the power plant for more than a year. On July 1, 2015, the Bocamina II power plant resumed operations, after the approval of a new RCA in April 2015. Also, between November 23, 2015 and January 7, 2016, a second group of fishermen illegally occupied the first high-tension pylon which supports the 154 kV and 220 kV circuits owned by Transelec S.A. and serve the Bocamina I and II power plants. As a consequence, both Bocamina I and II power plants were temporarily shut down. This second group claimed that they should receive the same benefits that Enel Generación Chile granted to the first group of fishermen in the zone. The financial effects of this illegal occupation and electricity transmission interruption amounted to Ch$ 2.8 billion of losses between November 23, 2015 and January 7, 2016. At the level of the electrical system, this situation increased the spot prices and the anticipated use of hydroelectric reserves. Such groups and other similar groups may have the ability to block our power plants and directly affect our results.

The operation of our current thermal power plants may also affect our goodwill with stakeholders, due to emissions such as particulate matter, sulfur dioxide (SO2) and nitrogen oxide (NO), which could adversely affect the environment.

Damage to our reputation may exert considerable pressure on regulators, creditors, and other stakeholders and ultimately lead to projects and operations that may be abandoned, causing our share prices to drop and hindering our ability to attract and retain valuable employees, any of which could result in an impairment of our goodwill with stakeholders.

Political events or financial or other crises in any region worldwide can have a significant impact in Chile, and consequently, may adversely affect our operations as well as our liquidity.

Chile is vulnerable to external shocks, including financial and political events, which could cause significant economic difficulties and affect growth.   If the Chilean economyChile experiences lower than expected economic growth or a recession, it is likely that our customers will demand less electricity and that some of our customers may experience difficulties paying their electric bills, possibly increasing our uncollectible accounts.  Any of these situations could adversely affect our results of operations and financial condition.

Financial and political events in other parts of the world could also adversely affect our business.  For example, the 2016 presidential electionsince 2018, U.S. and China have been involved in the United States considerablya trade war involving protectionist measures, which increased the volatility of financial markets worldwide based ondue to the uncertainty of political decisions.  New United States policies could affect world markets and global trade and result in renewed volatility, especially in commodity prices.  Moreover, instabilityInstability in the Middle East or in any other major oil producingoil-producing region could also result in higher fuel prices worldwide, which in turn could increaseincreasing the operating cost of fuel for our thermal generation plants and adversely affect our results of operations and financial condition.

In addition, an

The U.S. federal government has experienced shutdowns in recent times, including the 2018—2019 U.S. government shutdown, which affected the SEC among many other federal agencies, and extended for 35 days, the longest federal government shutdown in U.S. history.  Even temporary or threatened U.S. government shutdowns could have a material adverse effect on the timing, execution and increased expense associated with our international financings and our M&A activities.

An international financial crisis and its disruptive effects on the financial industry could adversely impact our ability to obtain new bank financings on the same historical terms and conditions that we have benefited from to date.

Political events or financial or other crises could also diminish our ability to access the Chilean and international capital markets or increase the interest rates available to us.  Reduced liquidity, could, in turn, could adversely affect our capital expenditures, our long-term investments and acquisitions, our growth prospects and our dividend payout policy.

We may be unable to enter into suitable acquisitions.acquisitions or successfully integrate businesses that we acquire.

On an ongoing basis, we review acquisition prospects that may increase our market coverage or supplement our existing businesses, though there can be no assurance that we will be able to identify and consummate suitable acquisition transactions in the future.  The acquisition and integration of independent companies that we do not control is generally a complex, costly and time-consuming process and requires significant efforts and expenditures.  If we consummate an acquisition, it could result in the incurrence of substantial debt and assumption of unknown liabilities, the potential loss of key employees, amortization of expenses related to tangible assets and the diversion of management’s attention from other business concerns.  In addition, anyintegrating acquired businesses may be difficult, expensive, time-consuming and a strain on our resources and our relationships with our employees and customers and ultimately may not be successful or achieve the benefits expected.  Any delays or difficulties encountered in connection with acquisitions and the integration of multiple operationstheir businesses could have a material adverse effect on our business, financial condition or results of operations.

Our business and profitability could be adversely affected if water rights are denied or if water concessions are granted with limited duration.

We own water rights granted by the Chilean Water Authority (Dirección General de Aguas) for the supply of water from rivers and lakes near our production facilities.  Under current law, these water rights are (i) for unlimited duration, (ii) absolute and unconditional property rights and (iii) not subject to further challenge.  Chilean generation companies must pay an annual license fee for unused water rights.  New hydroelectric facilities are required to obtain water rights, the conditions of which may impact design, timing or profitability of a project.

In addition, the Chilean Congress is currently discussinghas discussed amendments to the Water Code since 2014 in order to prioritize the use of water by defining its access as a basic human rightneed that must be guaranteed by the State.  The amendment will establish that water use for human consumption, domestic subsistence and sanitation will always take precedence, in both the granting and limiting the exercise of rights of exploitation.  Under the proposal: (i) new water use concessions would be limitedRestrictions enacted to 30 years, which would be extendable with respect to water rights actually used during the 30-year period, unless the Chilean Water Authority demonstrates the water rights have not been used effectively; (ii) new non-consumptive water rights would expire if the holder does not exercise the rights within eight years; (iii) existing non-consumptive water rights which have not been used would expire within eight years from the date of enactment of the new Water Code; and (iv)  the preservation of waterpreserve environmental flows to protect the ecosystem for future water rights was added for both consumptive and non-consumptive water use and empowers the Chilean Water Authority to mandate an environmental flow requirement for existing water rights. This last point would reduce water availability for generation purposes.

Any limitations on our current water rights, our need for additional water rights, or our current unlimited duration of water concessions could have a material adverse effect on our hydroelectric development projects and our profitability. 

Any limitations on our current water rights, our need for additional water rights, or our current unlimited durationAs of water concessions couldthe date of this Report, no resolutions have a material adverse effect on our hydroelectric development projectsbeen adopted and our profitability.the uncertainty remains.

Foreign exchange risks may adversely affect our results and the U.S. dollar value of dividends payable to ADS holders.

The Chilean peso has been subject to devaluations and appreciations against the U.S. dollar and may be subject to significant fluctuations in the future. Historically, a significant portion of our consolidated indebtedness has been denominated in U.S. dollars.  Although a substantial portion of our operating cash flows is linked to the U.S. dollarsdollar (primarily coming from the generation business), we generally have been and will continue to be materially exposed to fluctuations of the Chilean peso against the U.S. dollar, because ofwhich is due to time lags and other limitations to pegpegging our tariffs to the U.S. dollar and the eventualpotential difficulty of incurring debtobtaining loans in the same currency as our operating cash flow.

Because of this exposure, the U.S. dollar value of cash generated by our subsidiaries in U.S. dollars can decrease substantially due to peso devaluations against the U.S. dollar. Future volatility in the exchange rate of the currency in which we receive revenues or incur expenditures may adversely affect our business, results of operations and financial condition.

Our long-term energyelectricity sale contracts are subject to fluctuations in the market prices of certain commodities, energy and other factors.

In our conventional generation business, we have economic exposure to fluctuations in the market prices of certain commodities as a result of the long-term energylong term electricity sales contracts into which we have entered, and the fact that currently 83.0% of our expected annual generation is sold under contracts with terms of at least five years.entered. We have material obligations as selling parties under long-termlong term fixed-price electricity sales contracts. Prices in these contracts are indexed according to different commodities, the exchange rate, inflation,rates and the market price of electricity.inflation. Adverse changes to these indices would reduce the rates we charge under our long-term fixed-price electricity sales contracts, which could adversely affect our business, results of operations and financial condition.

In our distribution business, we are also exposed to fluctuations in energyelectricity prices.  DuringSince 2016, some customers who are ablehad freely chosen to choose their tariff according the Chilean regulation and chosebe subject to regulated tariffs inhave been switching to the past, elected unregulated tariffs instead.tariff regime instead due to the lower prices.  These customers are tendering their electricity needs, either directly or in association with other customers, their energy needs given that unregulatedbecause regulated tariffs are currently lowerhigher than regulated tariffs, which in generalunregulated prices, given that the former are based on contracts tendered in the past at higher prices.  Lower market prices might reduce the number of customers that choose regulated tariffs, and customers may choose an alternative energy provider, reducing our number of customers, which could adversely affect our business, results of operations and financial condition.

Our controlling shareholder may exert influence over us and may have a different strategic view for our development than that of our minority shareholders.

Enel, beneficiallyour controlling shareholder, owns 60.6%61.9% (excluding treasury stock) of our share capital.voting shares. Enel our ultimate controlling shareholder, has the power to determine the outcome of substantially all material matters that require shareholdera simple majority of shareholders’ votes in accordance with Chilean corporate law, such as the election of the majority of our board members and, subject to contractual and legal restrictions, the adoption of our dividend policy. Enel also exercises significant influence over our business strategy and operations. Its interests, may in some cases, may differ from those of our minority shareholders.  For example, Enel conducts its business operations in the field of renewable energy in Chile through Enel Green Power S.p.A. in which we have no equity interest. Certain conflicts of interest affecting Enel in these matters may be resolved in a manner that is different from interests of our company or of our minority shareholders.

Our electricity business is subject to risks arising from natural disasters, catastrophic accidents and acts of terrorism whichthat could adversely affect our operations, earnings and cash flow.

Our primary facilities include power plants and distribution assets. Our facilities may be damaged by earthquakes, flooding, fires and other catastrophic disasters arising from natural or accidental human causes, as well as acts of protest, vandalism, riot, and terrorism.  A catastrophic event could cause prolonged unavailability of our assets, disruptions in our business, significant decreases in revenues due to lower demand or significant additional costs to us not covered by our business interruption insurance.  There may be lags between a major accident or catastrophic event and the final reimbursement from our insurance policies, which typically carry a deductible and are subject to per event policy maximum amounts.

In our distribution business, on May 6, 2015 a fire damaged the Alonso de Córdoba Substation in Santiago, cutting power to 50,000 customers in eastern Santiago, where a significant part of the commercial and financial activity of the city is located. Damages totaled US$ 5.8 million. The Chilean authority also fined Enel Distribución Chile 6,000 UTM or (Ch$ 277.1 million).

We are subject to financing risks, such as those associated with funding our new projects and capital expenditures, and risks related to refinancing our maturing debt; we are also subject to debt covenant compliance, all of which could adversely affect our liquidity.

As of December 31, 2016,2018, our consolidated interest-bearing debt totaled Ch$ 820 billion.

Our consolidated interest-bearing2,479,624,032 (including Ch$ 447,317,781 in debt had the following maturity profile:with EFI, a related company).

Some of our debt agreements are subject to (1) financial covenants, (2) affirmative and negative covenants, (3) events of default and (4) mandatory prepayments for contractual breaches, among other provisions.  A significant portion of our subsidiaries’ financial indebtedness is subject to cross default provisions, which have varying definitions, criteria, materiality thresholds and applicability with respect to subsidiaries that could give rise to such a cross default.  We incurred debt in connection with the 2018 Reorganization.  As a result, we entered into a debt agreement and we issued US$ 1 billion in bonds in the U.S that are subject to cross default provisions.  In addition, since April 2018, we consolidate EGP Chile’s debt and we may incur in additional debt in the future, which may increase our debt leverage and associated financial risk.

In the event that we or our subsidiaries breach any of these material contractual provisions, our debtholders may demand immediate repayment, and a significant portion of our subsidiaries’ indebtedness could become due and payable.  We may be unable to refinance our indebtedness or obtain such refinancing on terms acceptable to us.  In the absence of such refinancing, we could be forced to dispose of assets in order to make the payments due on our subsidiaries’ indebtedness under circumstances that might not be favorable to obtaining the best price for such assets.  Furthermore, we may be unable to sell our assets quickly enough, or at sufficiently high prices, to enable us to make such payments.

We may also be unable to raise the necessary funds required to finish our projects under development or under construction.  Market conditions prevailing at the moment we require these funds or other unforeseen project costs can compromise our ability to finance these projects and expenditures.

Our inability to finance new projects or capital expenditures or to refinance our existing debt could adversely affect our results of operation and financial condition.

We rely on electricity transmission facilities that we do not own or control.  If these facilities do not provide us with an adequate transmission service, we may not be able to deliver the power we sell to our final customers.

We depend on transmission facilities owned and operated by other unaffiliated power companies to deliver the electricity we sell.  This dependence exposes us to several risks.  If transmission is disrupted, or transmission capacity is inadequate, we may be unable to sell and deliver our electricity.electricity, as has been the case of some of our solar and wind power plants located in northern Chile.  If a region’s power transmission infrastructure is inadequate, our recovery of sales costs and profits may be insufficient.  If restrictive transmission price regulation is imposed, transmission companies upon whom we rely may not have sufficient incentives to invest in expansion of their transmission infrastructure, which could adversely affect our operations and financial results.  Currently, theThe construction of new transmission lines is takingmay take longer than in the past, mainly because of new social and environmental requirements that are creating uncertainty aboutas to the probabilitytime of completingproject completion.

There have been blackout events in the projects.

In addition, the increase of new NCRE projects is congesting the current transmission system as these projects can be built relatively quickly, while new transmission projects may take longer to be built. In May 2014, the Chilean government’s Energy Agenda established a long-term energy policy. In 2016, a new transmission law called for the interconnection between the Chilean Central Interconnected System (“SIC” in its Spanish acronym) and the Northern Interconnected System (“SING” in its Spanish acronym) by 2019.

On September 24, 2011, nearly 10 million people located in central Chile experienced a blackout (affecting more than half of the Chilean population),past due to the failure of Transelec’s 220 kV Ancoa substation. The failure led to the disruption of two 500 kV transmission lines, in the SIC and the subsequent failure of the remote recovery computer software used by the independent entity that coordinates generators, transmission companies and large customers (“CDEC” in its Spanish acronym) to operate the grid. This blackout, which lasted two hours, exposed weaknesses in the transmission grid and its need for expansion and technological improvements to increase the reliability of the transmission grid.its reliability.  Additional failures of lesser magnitude have occurredtransmission lines may occur in the recent past.future.

Any such disruption or failure of transmission facilities could interrupt our business, which could adversely affect our results of operations and financial condition.

Our business may experience adverse consequences if we are unable to reach satisfactory collective bargaining agreements with our unionized employees or if we are unable to retain key employees.

A large percentage of our employees are members of unions and have collective bargaining agreements that must be renewed on a regular basis.  Our business, financial condition and results of operations could be adversely affected by a failure to reach agreement with any labor union representing such employees or by an agreement with a labor union that contains terms we view as unfavorable.  Chilean law provides legal mechanisms for judicial authorities to impose a collective bargaining agreement if the parties are unable to come to an agreement, which may materially increase our costs beyond what we have budgeted.

In addition, we employ many highly-specialized employees, and certain actions such as strikes, walk-outs or work stoppages by these employees, could adversely impact our business, results of operations and financial condition as well as our reputation.

The relative illiquidity and volatility of the Chilean securities markets and its dependence on economic conditions in Latin America and other parts of the world could adversely affect the price of our common stock and ADS.