Enel Chile S.A. Annual Report 2018

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FY2018 Annual Report · Enel Chile S.A.

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Annual Report
Enel Chile
2018

Santiago Stock Exchange

ENELCHILE

New York Stock Exchange

ENIC

Enel Chile S.A. was initially incorporated as Enersis Chile S.A., on March 1, 2016. On October 18, of the same year,

the company changed its name to Enel Chile S.A. As of December 31, 2018 the company´s total subscribed and

paid capital amounted to Ch$ 3,954,491,478,786 represented by 70,134,077,818 ¹ shares. These shares are traded

on the Santiago Stock Exchange and, as American Depository Receipts (ADR) on the New York Stock Exchange.

The company's business is to exploit, develop, operate, generate, distribute, transform and/or sell energy, in any

form and nature, directly or through other companies.

Total assets as of December 31, 2018, amounted to ThCh$ 7,488,020,164. Enel Chile controls and manages a

group of companies that operate in the Chilean electricity market. In 2018, net income attributable to the con-

trolling shareholder reached ThCh$ 361,709,937 and operating income was ThCh$ 670,604,721. At year end 2018,

a total 2,062 people were directly employed by its subsidiaries in Chile.

(¹) : Total shares consider 967,520,599 shares of treasury stock generated by the process of withdrawal right carried out during the Elqui project.

Annual Report
Enel Chile
2018

Annual Report Enel Chile 2018Content

> Letter from the Chairman ......................................................................................................... 4

> Open Power ............................................................................................................................. 8

> Milestones 2018 .................................................................................................................... 10

> Main Financial and Operating Data ........................................................................................ 15

> Identification of the Company and Documents of Incorporation ........................................... 19

> Ownership and Control .......................................................................................................... 23

> Management .......................................................................................................................... 29

> People and Organization ........................................................................................................ 43

> Stock Markets Transactions ................................................................................................... 53

> Dividends .............................................................................................................................. 61

> Investment and Financing Policy ........................................................................................... 67

> Historical Background............................................................................................................. 71

> Investments and Financial Activity ......................................................................................... 75

> Risk Factors ........................................................................................................................... 81

> Company Reorganization "Elqui Project" ................................................................................ 95

> Industry Regulation and Electricity Industry Operations ........................................................ 99

> Electricity Generation ........................................................................................................... 109

> Electricity Distribution .......................................................................................................... 125

> Environment and Sustainability ............................................................................................ 133

> Participation in subsidiaries & associates and schematic table ............................................ 143

> Significant Events ................................................................................................................ 149

> Identification of Subsidiaries and Associate Companies ...................................................... 157

> Statement of Responsibility ................................................................................................. 167

Content

1. Letter from the Chairman

Dear shareholders,

We are the most diversified company in the market. The

I hereby present the Annual Report and Financial State-

reorganization, known as the Elqui Project, was a success.

ments of Enel Chile for 2018. You will find a description of

The Public Tender (PTO) for Enel Generación, left us with

the main activities carried out by the Enel Group during the

93.55% of the capital of Enel Generación. This gave way

year through Enel Generación, Enel Green Power (EGP),

to a corporate restructuring that meant involving Enel Chile

Enel Distribución, and Enel X.

in all the projects Enel Green Power Latin America has in

I would like to thank the directors, managers, and collab-

erations, including both conventional and non-conventional

the country. As a result, we now control all generation op-

orators who work with us for everything they have done

plants.

for the company throughout the year. I would also like to

thank them for the trust they have placed in the company´s

Within the context of the Elqui Project, in June the com-

management, and for supporting the new directions we

pany issued its first bond in the United States, a one mil-

are taking.

lion-dollar, 10 year bond, with a 4.875% coupon rate. The

demand was over 2.5 times the amount allocated. The

During 2018, EBITDA grew 20.6%, reaching Ch$ 891,355

funds will be used to refinance a large portion of the shares

million by year end. This growth is mainly due to the

that were acquired through the PTO launched for Enel Gen-

addition of EGP and to a more efficient generation mix

eración.

because of greater hydroelectric dispatch. It was a year of

growth and changes in the organization, beginning with the

In Enel Generación we take on big challenges when it

designation of our new CEO, Paolo Pallotti that has been in

comes to the environment and sustainability. In January,

Enel for almost three decades. He took on this challenge

our Bocamina thermoelectric plant became the first gen-

following the departure of Nicola Cotugno, who´s commit-

erator in the company to participate in a pilot project im-

ment to the company was remarkable.

plemented by the Government Environmental Agency to

Annual Report Enel Chile 2018monitor emissions in real time. Also, in 2018, Bocamina

In August, the Enel Distribution Board appointed Ramón

finished installing the second dome to store 140,000 tons

Castañeda as the new CEO, replacing Andreas Gebhart,

of coal in its facility.

who worked for the Group for 25 years. I would like to per-

sonally thank Andreas for his excellent contribution to the

We have reached a good understanding with our power

company and wish Ramón a successful administration.

plant´s neighboring communities. We took four women

from the Cerro Obligado area in Coronel to Italy to share

Throughout 2018, the distribution business focused on

their eco-construction experiences as part of the Enel

improving service standards. As an example, the massive

Group´s International Encounter program. In the Antofa-

1,250-kilometer helicopter inspection of medium and high

gasta region, located in northern Chile, we inaugurated one

voltage lines. This allowed us to detect sensitive spots in

of the first sustainable light posts built by the community

the network, repair them, and prevent potential future ser-

along with the fishermen of Caleta Paposo, Additionally, as

vice interruptions.

a result of our work with the farmers of the Maule river ba-

sin related to water management, the Recyclapolis Foun-

We also installed 180 thousand smart meters in the

dation gave Enel Generación the National Environmental

Metropolitan Region this year, reaching a total of almost

Award in the water category of Large Companies.

292 thousand meters installed this far, contributing to the

efficiency of the electricity industry in the country.

The energy we generated during 2018 reached a total

20,046 GWh, increasing 17% when compared to the previ-

We want to be a diversified company that goes beyond

ous period. This growth is mainly due to the incorporation

electricity generation and distribution by promoting elec-

of Enel Green Power´s generation capacity, and due to fa-

tromobility, among other things. In February, we launched

vorable hydrology.

Enel X, the new brand and division of products and services

that, with innovative, sustainable and digital solutions, of-

EPG´s Cerro Pabellón plant was recognized in the Geolac

fers new applications to energy, with four new business

Awards with the Latin-American award for the Best Geo-

lines: e-City, e-Home, e-Industries, and E-Mobility.

thermic Project. The prize was received for being the first

plant of its kind in South America in a remote geographical

Additionally, seeking to promote technological develop-

location, and at the highest altitude in the world. We have

ments in infrastructure and electric mobility, we participat-

also kept our promise to create job opportunities and sup-

ed as the Official Power Partner in the Formula E, which

ply local nearby communities with electricity.

took place in Santiago for the first time.

We inaugurated the first Renewable Energy Control Room,

We offered our workers electric vehicles and also inaugu-

where all our NCRE power plants, a total 4.7 GW of in-

rated the Green Parking Lot, equipped with 20 chargers

stalled capacity, are monitored and managed. This is the

that can operate simultaneously making us the company

biggest control room in the country, and the only one in

with the greatest electric car charging ecosystem in the

South America to integrate hydroelectric, solar, wind and

country.

geothermic technologies.

Letter from the Chairman We continue to grow in public transportation. Enel X pur-

chased the first 100 electric BYD buses that will be oper-

ated by Metbus under a leasing arrangement. This fleet of

buses operate in the Grecia Avenue corridor since Decem-

ber. We also installed Latin-America´s first electrotermi-

nals, one in the Peñalolen district and one in Maipu. I have

no doubt that these first 100 electric buses we imported

with the support of the Government, represent an auspi-

cious beginning to a new public transportation system that

will integrate the subway and a significant number of bus

routes.

During 2018, we also expanded into other cities in Chile,

other than Santiago. We brought the first electric bus to

Concepción, and along with the municipality and the De-

partment of Transportation, we inaugurated the first free

electric bus route in this city.

Such developments have led us to be included in the Dow

Jones Sustainability Emerging Markets Index, in the Dow

Jones Sustainability MILA 1 Pacific Alliance Index, and in

the Dow Jones Sustainability Chile Index for the first time.

This recognizes the importance the Company has placed

on responsible corporate governance and sustainability.

Looking beyond the work we perform on a daily basis,

we also aspire to contribute to the community in other

ways. This year we were part of the Code Blue Plan and

offered our corporate gymnasium in Santiago as a shelter

for homeless people on the coldest and rainiest nights of

the winter season. We continued to encourage youngsters

to participate in sports through the Enel Cup that received

more than 150 teams from three regions of the country,

making it the most important scholastic soccer tourna-

ment in Chile. We are also proud to tell you that Enel Chile

participated in the 40th Annual Telethon, an opportunity to

contribute to a special cause that also motivates and brings

joy to our collaborators.

Annual Report Enel Chile 2018Internationally, our brand has strengthened substantially

ments in terms of energy efficiency and distribution have

and was distinguished with the Brand of the Year Award,

no other objective than to satisfy our customers’ needs.

National Tier, 2018-2019, as part of the World Branding Fo-

Hence, we need to keep moving forward, to implement all

rum.

innovations available in the market to satisfy our customer.

We were recognized by Mujeres Empresarias, an organi-

The country is growing and developing at a heady pace,

zation that supports women in business, and by Pontifi-

accompanied by social changes that indicate the beginning

cia Universidad Catolica´s Center for Social Studies in their

of a new era, in which service will become a fundamental

IMAD ranking, for women participation in the Company.

component of business.

We also received the Impulsa Female Talent Award in the

Utilities category granted by PwC Chile, ChileMujeres

Our efforts, and all our organization´s efforts, are directed to-

Foundation and Pulso. Both distinctions fill us with pride,

wards professionalism and service excellence, contributing

because in Enel Chile we value women´s contributions.

to the creation of value for all our shareholders. We seek

Hence, this year, on International Women’s Day, we recog-

to create a good place to work for our collaborators, and of

nized those women who stand out in diverse areas, such

course, be leaders in energy transformation, caring for our

as art, environment, communications, and entertainment,

country, our customers, and our communities.

with the Woman´s Energy Award.

I want to take advantage of this opportunity to highlight

port and trust in this administration.

I would like to thank the shareholders for their ongoing sup-

the permanent contribution we receive from our controlling

shareholder in numerous matters. The importance and

Sincerely,

concern the directors at Enel SpA place on the Company

has allowed us to learn and grow from the experience they

have gained through their many years in the industry.

Enel stands out for being at the forefront of innovation and

technology in the field. We have focused on increasing

our solar, wind, and geothermic capacity for years. I must

mention the construction of our Los Cóndores plant, a hy-

droelectric facility that will contribute with more than 150

MW to the system. This balance between different types

of generation allows us to be relevant players in an increas-

ingly competitive market. Similarly, in distribution, we are

working on improving energy efficiency to better respond

to the needs of an electro dependent society. I refer to effi-

ciency in electricity distribution in a broad sense, including

digital metering devices, among other things. The improve-

Herman Chadwick Piñera

Chairman of Enel Chile

Letter from the Chairman 2. Enel Chile is Open Power

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3. Milestones 2018

JANUARY
SMA and Enel Generación
C h i l e s t a r t e d u p t h e
continuous emissions
monitoring system
The Superintendence of
the Environment (SMA
in its Spanish acronym)
implemented a pilot project
to obtain real time data of
thermal electric power
plant emissions. It began
operations in Bocamina.
Enel Generación Chile
took on the challenge to
be the first power plant in
the country to participate.

Women from Coronel
travel to Italy to share their
bioconstruction experience
Four women from the
C e r r o O b l i g a d o a r e a
w e r e I n v i t e d t o I t a l y
t o p a r t i c i p a t e I n a n
International event of
the Enel Group to share
their experience with
bioconstruction. These
four artisans participated
i n E n e l G e n e r a c i ó n
C h i l e ´ s p r o g r a m t o
p r o m o t e s u s t a i n a b l e
entrepreneurship within
the communities. Letty
N u ñ e z , C l a u d i a a n d
L o r e n a S a n d o v a l a n d
Elba Gutierrez told their
stories and described
how their motivation to
work for their community
encouraged them to learn
this new eco carpentry
trade that, in addition to
being sustainable and
profitable, also benefited
their neighbors in Coronel.

FEBRUARY
Chile hosted the third
Formula E race and Enel
was the Official Power
Partner
The single seater electric
c a r r a c e t o o k p l a c e
o n F e b r u a r y 3 i n t h e
Parque Forestal streets
of Santiago. Enel Chile
was the Official Power
Partner to promote the
d e v e l o p m e n t o f t h e
electrical infrastructure of
this sport event.

Enel presents Enel X Chile,
the new division in charge
of developing products
and services based on
innovative, sustainable and
digital solutions
Enel presented Enel X
in Chile to open energy
t o n e w u s e s , n e w
technologies and new
services using a strategy
based on digitalization,
i n n o v a t i o n a n d
sustainability. The purpose
of this new global brand
and division of Enel is to
satisfy customer needs
through four new business
lines: e-city, e-Home,
e-Industries, E-Mobility.

Fitch Ratings begins the
local rating of Enel Chile
S.A.
Fitch Rating gave Enel
Chile a AA local credit
rating with a stable outlook.

E n e l b e g a n t h e a e r i a l
i n s p e c t i o n o f 1 , 2 5 0
kilometers of medium and
high voltage power lines
A s p e c i a l l y d e s i g n e d
helicopter with state-
o f - t h e - a r t t e c h n o l o g y
flew over a total 1,250
kilometers of medium and
high voltage power lines
from 33 districts of the
Metropolitan Region of the
country to detect the weak
spots of Enel Distribución
network to anticipate and
prevent potential service
interruptions during the
winter months.

Y o u n g s t u d e n t s f r o m
Calama and the Innovation
formula
Three students from the
Kamar Mayu elementary
school In Calama won the
Play Energy Chile 2017
program carried out by
Enel Chile to encourage
learning about energy.
Within this context, the
t h r e e s t u d e n t s w e r e
invited to the Formula E
electric car race in Punta
del Este.

MARCH
Enel Chile declares the
Enel Generación PTO a
success ending the Elqui
Plan successfully
E n e l C h i l e s u b m i t t e d
a Significant Event to
t h e F i n a n c i a l M a r k e t
Commission declaring
the PTO to purchase the
shares of Enel Generación
Chile a success, reaching a
93.55% ownership share.
The success of this PTO
allowed Enel Chile to
carry out the corporate
reorganization involving
the merger of Enel Green
Power Latin America S.A.

Enel Chile acknowledges
13 Chilean women for their
outstanding contribution
to the development of the
country
Within the context of the
International Women's
Day, the twelfth version
of the Women Energy
A w a r d a c k n o w l e d g e d
t h i r t e e n o u t s t a n d i n g
C h i l e a n w o m e n f o r
t h e i r c o n t r i b u t i o n i n
f i e l d s , s u c h a s , a r t ;
music and lyrics; public
service; environment;
e n e r g y e f f i c i e n c y
a n d s u s t a i n a b i l i t y ;
education; innovation
and new ventures; public
d e b a t e ; c o m m u n i t y
w o r k ; j o u r n a l i s m a n d
social communication;
entertainment and sports.

Annual Report Enel Chile 2018T h e c o n s t r u c t i o n o f
Bocamina´s second dome
concludes
The south dome of the
Bocamina power plant
m a y s t o r e u p t o 1 4 0
thousand tons of coal. This
south dome is additional
to the north dome that
was built in 2017. This
m a k e s B o c a m i n a t h e
first electricity generation
facility to implement this
type of system to improve
coal management. The
roof on the south coal
field is in addition to the
one in the north field built
in 2017. The dome is a civil
engineering and thermal
construction project, a
milestone for domestic
and regional engineering
becausee thay were built
in record time and with no
one injured.

Enel Chile participates in
the Blue Code Plan and
transforms the corporate
gymnasium into a shelter
The Company contributed
t o t h e G o v e r n m e n t ´ s
c a m p a i g n t o p r o t e c t
homeless people from
the cold and rain during
days with critical weather
conditions in winter by
m a k i n g t h e c o r p o r a t e
gymnasium available as a
shelter.

G a s i s e x p o r t e d t o
Argentina for the third
consecutive year
Natural gas was exported
from Chile to Argentina
once again after both
c o u n t r i e s s i g n e d a n
agreement establishing the
general terms of the fuel
supply transaction to take
place during the winter for
the following three years.
ENAP, Enel Generación
Chile and Aprovisionadora
Global de Energia S.A.
(AGESA) would supply
the natural gas using the
pipelines of Electrogas
and GasAndes. GasAndes
has a 450 km pipeline
that crosses the Andes
Mountains from Chile´s
Metropolitan Region Chile
to the Mendoza Region in
Argentina

JULY
Enel Chile receives the
Brand of the Year Award
National Tier 2018-2019
The Company received the
Brand of the Year Award
National Tier 2018-2019 in
a ceremony that took place
in the Plaza Hotel in New
York. This award is part of
the World Branding Forum
program that evaluates
different brands within
three categories :national,
r e g i o n a l a n d g l o b a l ,
based on three criteria:
brand valuation, online
public vote and market
consumption research.

Board of Directors of Enel
Distribución Chile appoints
Ramon Castañeda as new
Chief Executive Officer
T h e d e c i s i o n w a s
a n n o u n c e d t h r o u g h a
Significant Event. He took
office on August 16, 2018.
Ramon Castañeda is a civil
engineer from Universidad
Catolica de Chile and also
holds a masters degree in
engineering from the same
university and a MBA from
Universidad Adolfo Ibañez.
He began his career in the
Enel group in 1995 and
has held positions in Chile
and overseas. His previous
position was CEO of Enel
Distribución Rio.

MAY
S t a n d a r d & P o o r ’ s
maintained Enel Chile´s
International Rating
T h e i n t e r n a t i o n a l r i s k
rating agency gave Enel
Chile a “BBB+” rating
with a stable outlook, an
"Investment grade" rating.

M o o d y ´ s b e g i n s
International rating of Enel
Chile S.A.
The company received a
"Baa2" rating with a stable
outlook. The Company´s
leadership position in the
generation market and
distribution market in Chile
was highlighted.

JUNE
Enel Chile successfully
c a r r i e s o u t f i r s t b o n d
issuance in the United
States
The Company issued its
first U.S. bond, a 10 year,
1-billion-dollar bond with
a 4.875% coupon rate.
The funds are primarily
to be used to refinance
the bridge loan obtained
within the context of the
Enel Generación PTO of
the Elqui Project. Demand
for the bond issued was
2.5 times greater than the
amount placed.

Enel Chile received the
Female Talent Promotion
A w a r d i n t h e u t i l i t i e s
category
PwC Chile, Fundación
Chile Mujeres and PULSO
together offer this award
t o a c k n o w l e d g e t h e
companies within each
category that promote
women in the workplace
by hiring a significant
number of women and
offering equal pay. It
i s b a s e d o n p u b l i c
information to December
2 0 1 7 p r o v i d e d b y t h e
CMF´s norm NCG 386.

The Legal Department of
Enel Chile receives the
Silver Award in the "Best
Legal Department in Latin
America 2018 " category.
This award was presented
in the eleventh version
o f t h e I n t e r n a t i o n a l
Legal Alliance Summit &
Awards (ILASA 2018). It
acknowledges the best
l e g a l d e p a r t m e n t s i n
the world within three
categories, Latin American,
North America and Europe.

Feller Rate maintains Enel
Chile´s risk rating
The Company was locally
rated "AA" with a stable
outlook by Feller Rate in
2017 for the first time.

Milestones 2018

Cerro Pabellón power plant
is recognized as the best
Geothermal Project at the
2018 Geolac Awards
The geothermal power
plant was acknoleged as
the ¨Best Project" at the
G E O L A C a w a r d s t h a t
was organized by the
Geothermal Congress
for Latin America and the
Caribbean. According to
the jury, which included
a world leading advisory
committee, Cerro Pabellón
r e c e i v e d t h e a w a r d ,
among other things, for
being the first geothermal
plant in Chile and South
America, being built in a
very remote geographic
location, and at the highest
altitude in the world and
for the commitment to
t h e s u r r o u n d i n g l o c a l
communities, creating
j o b o p p o r t u n i t i e s a n d
permamantely supplying
electricity to nearby towns.

AUGUST
Enel X inaugurated "Green
Parking", a parking lot with
more than 20 electric car
chargers and also provided
n e w e l e c t r i c c a r s f o r
employees.
A s a m i l e s t o n e i n
e l e c t r i c m o b i l i t y a n d
its massification in the
country, Enel X provided
the employees of the Enel
Group in Chile with a new
fleet of 100% electric cars
and inaugurated a parking
lot designed for this type
of vehicle named "Green
Parking". It has more
than 20 chargers that can
operate simultaneously.
This makes the company
the one with the largest
e l e c t r i c c a r c h a r g i n g
ecosystem in the country.

Enel X, the Municipalidad
de Concepcion and the
Ministry of Transportation,
together, inaugurated the
first electric bus route in
the Bio Bio Region
Enel X inaugurated the first
bus route to use a 100%
electric bus in the capital
city of the Bio Bio Region.
The electric bus with air
conditioning, Wi-Fi and
mobile devise charging
c o n n e c t i o n s , o f f e r s a
free tour to the city´s
emblematic locations.

SEPTEMBER
B o a r d o f D i r e c t o r s o f
Enel Chile appoints Paolo
P a l l o t t i a s n e w C h i e f
Executive Officer of the
Company
The Board of Directors
informed that Paolo Pallotti
would become the new
Chief Executive Officer on
October 1. Paolo Pallotti is
an electronic engineer from
the Università Degli Studi
di Ancona and joined the
Enel Group in 1990. He
was previously the Chief
Finance and Control Officer
of Enel Américas.

Enel Chile inaugurates the
largest renewable energy
control room in the country
Enel Chile inaugurated the
Renewable Control Room
in its corporate building,
where all the Company´s
renewable energy power
plants are monitored and
managed. The total 4.7 GW
of renewable generation
c a p a c i t y i s r e m o t e l y
operated from this room,
the largest of its kind in the
country. It Is also the only
one in South America with
all four renewable energy
generation technologies,
hydro, solar, wind, and
geothermal.

OCTOBER
Enel Chile's Cerro Pabellón
project won first place
in the Good Practices
contest awarded by Chile´s
Electricity Generation
Company Association.
The goal of this contest,
performed for the first
time, was to disseminate
best practices in electricity
use and generation. The
companies participating
had to quantitatively and
qualitatively demonstrate
t h e i r c o n t r i b u t i o n t o
sustainable development
objectives. Cerro Pabellón
project won first place for
its plan to offer electricity
in isolated communities.

Teams from Independencia
are the champions of Copa
Enel 2018 and travel to
Italy to face Inter from
Milan.
T h e t e a m s f r o m
Independencia, the girls in
the 15 and under category
and the boys in the 13 and
under, surprised the teams
of Inter from Milan in their
own field, by winning the
"Integration Cup" trophy in
exciting and tight matches.
They traveled accompanied
by the captain of Chile´s
team, Ivan Zamorano.

Enel Chile announces
changes to the Finance,
Management and Control
Department
The Board of Directors
appointed Marcelo Antonio
De Jesus as Chief Finance,
Management and Control
Officer of the Company.
H e h o l d s a d e g r e e i n
Business Management
from USCS - Universidad
de São Caetano do Sul,
1993, and an MBA from
Fundación Dom Cabral.
His previous position was
CFO and Investor Relations
Director in Electropaulo.

Enel Chile confirms its
leadership position in
sustainability by being
included in the Dow Jones
Sustainability Index.
T h e C o m p a n y w a s
i n c l u d e d i n t h e D o w
J o n e s S u s t a i n a b i l i t y
Emerging Markets Index,
Dow Jones Sustainability
MILA1 Pacific Alliance
Index, and the Dow Jones
Sustainability Chile Index
for the first time. The
ranking acknowledges the
company´s sustainable
e n e r g y m o d e l a n d i t s
corporate responsibility
practices.

Significant participation of
non-Metropolitan Regions
in Copa Enel 2018
More than 150 teams from
three regions in the country
participated in this event
that is becoming the most
important grade school
championship in Chile. The
famous former captain of
Chile´s soccer team, Ivan
Zamoramo that continues
to be the ambassador of
this event, highlighted the
participation and second
place of the women’s team
of the Universidad Católica
de Concepcion. For the
first time in the seventeen
years of existence of Copa
Enel a team from outside
the Metropolitan Region
came in second and won
a trip to Brazil.

Annual Report Enel Chile 2018DECEMBER
Enel Chile confirms its
position in FTSE4GOOD
After the second semester
review, the company was
confirmed in its position
in the FTSE4GOOD Index
S e r i e s , i n c l u d i n g t h e
Emerging Markets Index
and Latin American Index.
FTSE4GOOD is a series
of indexes developed to
measure the performance
of companies that stand
out for their environmental,
s o c i a l a n d c o r p o r a t e
governance practices. It
was developed by FTSE
Russel that belongs to the
London Stock Exchange
Group.

Enel X, Metbus and BYD
presented the first 100
electric buses to become
part of Santiago´s public
transportation system
It is the second largest
fleet in one sole city in
the world and the first
in Latin America. The
f i r s t L a t i n - A m e r i c a n
electro terminal for the
first 100 Chinese BYD
electric buses was also
inaugurated. These buses
were purchased by Enel X
and leased to Metbus to
be part of Santiago´s public
transportation system.

SMA and Enel Generación
Chile start up the second
phase of the continuous
monitoring system of
emissions
Enel Generación Chile
successfully connected
the continuous monitoring
system of emissions of the
second unit of Bocamina
located in Coronel to the
Superintendence of the
Environment as a voluntary
act of transparency to
transmit the raw data
registered by the system in
real time. Enel Generación
Chile is the first electricity
generation company to
successfully implement
this type of system. It
exceeds the requirements
o f t h e l a w a n d w a s
inaugurated with the SMA
In January 2018.

Enel Generación Chile
r e c e i v e s t h e N a t i o n a l
E n v i r o n m e n t A w a r d
Recyclapolis 2018
T h e R e c y c l a p o l i s
Foundation gave Enel
G e n e r a c i ó n C h i l e t h e
National Environment
A w a r d 2 0 1 8 i n t h e
w a t e r c a t e g o r y o f
l a r g e c o m p a n i e s f o r
i m p l e m e n t i n g t h e i r
Water Management for
Farmers Program in the
Maule Region. This fifth
edition of the Recyclapolis
A w a r d , f o c u s e d o n
h i g h l i g h t i n g t h e b e s t
projects that foster and
promote new sustainable
trends, acknowledging
companies, institutions
or individuals that show
t h e i r c o m m i t m e n t t o
environmental innovation
and improving efficiency.

NOVEMBER
Enel Chile was recognized
f o r h a v i n g w o m e n i n
executive positions by the
Imad Company Ranking
2018.
This initiative is carried out
by Mujeres Empresarias
jointly with the Social
Studies Department of
the Pontificia Universidad
C a t ó l i c a ( D E S U C i n
i t s S p a n i s h a c r o n y m )
to monitor objectives
and progress in female
participation and promotion
to executive and board
positions in the country´s
most important companies.

Liter of Light program
illuminates areas of Paposa
Community
Since November, new light
poles began to illuminate
Caleta Paposo, located in
the Antofagasta Region.
T h e s e w e r e t h e f i r s t
sustainable poles built by
the community itself as
part of a project carried
o u t j o i n t l y w i t h E n e l
Generación Chile and the
ideas of the Liter of Light
program.

Enel Chile contributes to
the 40 years of Telethon
In 2018, Enel Chile was
a n o f f i c i a l s p o n s o r o f
t h e T e l e t h o n f o r t h e
first time. The slogan
used in this 40th version
o f t h e t e l e t h o n w a s
"Enel, the energy of the
Telethon". This was not
only an opportunity for the
company to contributed
with a donation, but also
created an environment
of motivation and pride
a m o n g c o m m i t t e d
employees who proactively
and responsibly developed
s e v e r a l a c t i v i t i e s t o
contribute to this crusade.

Milestones 2018

Annual Report Enel Chile 201804

Main financial
and operating
data

Letter from the Chairman 16

Annual Report Enel Chile 2018Total Assets

Total Liabilities

Operating Revenue

EBITDA

Net Income (2)

Current Ratio

Debt Ratio (3)

Generation Business

Number of employees

Number of Generation units

Installed capacity (MW)

Electricity generated (GWh)

Energy sales (GWh)

As of As of December 31st of each year (figures in millions of Chilean pesos) (1)

2012

2013

2014

2015

2016 (5)

2017

2018

5,398,711

5,694,773

7,488,020

1,935,717

1,907,811

3,813,856

2,136,041

2,522,978

2,457,161

627,547

317,561

1.13

0.56

739,252

349,383

1.29

0.50

891,355

361,709

0.82

1.04

As of December 31 of each year

2012

1,141

105

5,571

19,194

20,878

2013

1,141

105

5,571

19,432

20,406

2014

1,261

111

6,351

18,063

21,157

2015

995

111

6,351

18,294

23,558

2016

883

111

6,351

17,564

23,689

2017

848

111

6,351

17,073

23,356

2018

930

130

7,463

20,046

24,369

As of December 31 of each year

Distribution Business

Energy sales (GWh) (4)

2012

2013

14,445

15,152

2014

15,690

2015

15,893

2016

15,924

2017

16,438

2018

16,782

Number of customers

1,658,637

1,693,947

1,737,322

1,780,780

1,825,519

1,882,394

1,924,984

Energy losses

Number of employees

Customers/Employees

5.40%

734

2,260

5.30%

745

2,274

5.32%

690

2,518

5.31%

686

2,596

5.33%

690

2,653

5.10%

669

2,814

5.02%

681

2,827

(1) Accounting figures as determined by the instructions and regulations issued by the SVS (currently Financial Market Commission or "CMF").
(2) Net earnings attributable to the controlling shareholder.
(3) Total Liabilities/Equity plus Minority Interest.
(4) Due to changes in the criteria, non-billable consumption (CNF in Spanish acronym) is not included in 2014 and 2015.
(5) Only ten months since its creation (March 1, 2016).

Main financial and operating data

Annual Report Enel Chile 201805

Identification of
the Company
and documents
of incorporation

Letter from the Chairman Identification of the
Company

Name

Address

Company Type

Taxpayer ID No

Address

Zip Code

Telephone No

P.O. Box

Securities Registration No

External Auditors

Subscribed and paid-in capital (Ch$)

Website

Investor Relations Telephone

Ticker in Chilean stock exchanges

Ticker in New York stock exchange

Custodial Bank-ADR’s

Depositary Bank-ADR’s

Domestic Risk Rating Agency

International Risk Rating Agency

Enel Chile S.A.

Santiago, although able to establish branches or agencies in other
parts of the country or abroad

Publicly held Limited Liability Stock Corporation

76,536,353-5

76 Santa Rosa St., Santiago, Chile

833-0099 SANTIAGO

(56) 22353 4400 – (56) 22378 4400

1557, Santiago

1,139

Ernst & Young

3,954,491,478,786

www.enel.cl; www.enelchile.cl

comunicacion.enelchile@enel.com

(56) 22353 4682

ENELCHILE

ENIC

Banco Santander Chile

Citibank N.A.

Feller Rate and Fitch Chile Clasiifcadora de Riesgos Limitada

Standard & Poor´s and Moody´s

Documents
of
incorporation

Enel Chile S.A., formerly “Enersis Chile S.A.”, was created

as a consequence of the corporate reorganization that be-

gan in April 2015. Enersis S.A. controlled the generation,

transmission and distribution business in Chile and four

other countries in the region (Argentina, Brazil, Colombia,

and Peru).

The Extraordinary Shareholders’ Meeting of Enersis S.A.

held on December 18, 2015, approved the first phase of

the reorganization plan named “the Division,” which cre-

ated Enersis Chile S.A. as the only vehicle to control the

Group’s generation and distribution assets in Chile. Enersis

S.A became Enersis Americas S.A., the vehicle to control

all assets of the businesses in other countries in the region.

The Division was recorded in a public deed issued on Jan-

uary 8, 2016 by the Santiago Notary Public, Mr. Ivan Torre-

alba Acevedo, and its extract was registered in the Com-

mercial Register (Registro de Comercio del Conservador

de Bienes Raíces y Comercio de Santiago) on pages 4,288

No 2,570 of 2016 and published in the Official Gazette on

January 20, 2016.

Later, on October 4, 2016, the shareholders of Enersis

Chile S.A. approved changing the name of the Company to

“Enel Chile S.A.” This agreement was recorded in a public

deed on October 18, 2016 by the Santiago Notary Public,

Mr. Ivan Torrealba Acevedo. Its extract was registered in

the Commercial Register (Registro de Comercio del Con-

servador de Bienes Raíces y Comercio de Santiago) on

pages 79,330 No 42,809 of 2016 and published in the Offi-

cial Gazette on October 28, 2016.

Annual Report Enel Chile 2018Finally, on December 20, 2017, the shareholders approved

as, software, hardware, licenses, software development,

amending the bylaws to include the agreements regarding

and in general, any product related to the aforementioned

the merger of Enel Green Power Latin America S.A. into

activities; and consulting services in all subjects related to

Enel Chile, its capital increase and other agreements

the previously mentioned subjects. It may also invest and

adopted during said Shareholders’ Meeting, replacing the

manage its subsidiaries and associate companies, whether

articles referring to its capital, and corporate purpose to

generators, transmitters, distributors or traders of electric-

include information technology and communications ,

ity or whose business is any of the following: (i) energy, in

among other amendments, and agreeing to the rewritten

any of its forms or nature, (ii) the supply of public utilities or

and updated text of the bylaws, subject to the conditions

whose main input is energy, (iii) telecommunications and

approved at the Meeting. The minute of said Shareholders’

information technology, and (iv) intermediation over the in-

Meeting was recorded as a public deed dated December

ternet. In complying with its main purpose, the company

28, 2017, by the Santiago Notary Public, Mr. Ivan Torrealba

will carry out the following functions:

Acevedo, and its extract was registered in the Commercial

a) Promote, organize, incorporate, modify, dissolve or

Raíces y Comercio de Santiago) on pages 1154 No 629 of

liquidate companies of any nature that have a corpo-

2018 and published in the Official Gazette on January 5,

rate purpose similar to the Company’s corporate pur-

2018.

pose.

Corporate
purpose

The corporate purpose of the company appears in the by-

law’s amendment approved by the Extraordinary Share-

holders Meeting held on December 20, 2017 and recorded

as a public deed dated December 28, 2017 granted by the

Santiago Notary Public Mr. Iván Torrealba Acevedo, and its

extract was registered on pages 1154 No 629 of 2018 and

published in the Official Gazette on January 5, 2018.

The Company’s purpose is to perform the exploration, de-

velopment, operation, generation, distribution, transmis-

sion, transformation and sales of energy in any of its forms

and nature, directly or through other companies, and also

research, development, operation, commercialization, pur-

chase, sale, imports and maintenance of any goods related

to information technology and telecommunications, such

b) Propose investment, financing and business policies

to subsidiary companies, as well as accounting crite-

ria and systems that these should follow.

c) Supervise the management of subsidiaries.

d) Provide subsidiaries or associate companies with the

necessary financing to develop their business and pro-

vide them management services; financial, technical,

legal and auditing advice; and in general, any service

that appears necessary to improve their performance.

In addition to its main purpose and always acting within

limits established by the Investment and Financing Policy

approved by the Shareholders Meeting, the Company may

invest in:

First. the acquisition, operation, construction, rental, ad-

ministration, intermediation, trading, and disposal of all

kinds of movable and immovable assets, either directly or

through subsidiaries or associate companies.

Second. all kinds of financial assets, including shares,

bonds and debentures, commercial paper and in general all

kinds of titles or securities and company contributions, ei-

ther directly or through subsidiaries or affiliate companies.

Identification of the Company and documents of incorporation

Annual Report Enel Chile 201806

Ownership and
control

Letter from the Chairman Ownership structure

Ownership structure

The total share capital of the Company was divided into 70,134,077,818¹ shares of a single series with no par value in which

each share represents the right to one vote. No shares give the State the right to veto.

During the reorganization process known as the Elqui Project, 967,520,599 company shares were repurchased as a con-

sequence of shareholders withdrawal rights and at December 31, 2018 they belong to Enel Chile.

As of December 31, 2018, all shares were subscribed and paid, and ownership was distributed as follows:

Shareholders

Enel S.p.A.

Pension Funds (A.F.P)

Foreign Investment Funds

Stock Brokers, Insurance companies and Mutual Funds

Citibank N.A. (Circular 1375 S.V.S)

Others

Total Outstanding Shares

Own shares held by the Company

Total Shares

Number of shares

Ownership share

42,832,058,392

9,808,247,640

7,577,686,633

4,784,113,081

2,707,448,873

1,457,002,600

69,166,557,219

967,520,599

70,134,077,818

61.93%

14.18%

10.96%

6.92%

3.91%

2.11%

100.00%

Identification of the
Controlling Shareholder

as of the date of its presentation, which took place on De-

cember 21, 2016.

The Board of Directors of Enel Iberoamérica S.R.L., in

As defined by Title XV of Law 18,045, Enel Chile S.A. is

its session held on April 6, 2017, agreed to divide Enel

controlled by Enel SpA., a publicly traded Italian company,

Iberoamérica S.R.L. and incorporate, according to Italian

that owns 61.93% of the shares issued by Enel Chile S.A.

regulation, Enel South América S.R.L. that would become

the sole owner of the interests held by Enel Iberoamérica

On December 19, 2016, Enel Latinoamérica, S.A. and Enel

S.R.L. in Enel Chile and Enel Américas S.A. According to

Iberoamérica, S.R.L. agreed to merge by the latter absorb-

such agreement, the incorporation of Enel Americas S.R.L.

ing the first and therefore dissolving Enel Latinoamérica,

was registered in the Company Register of Roma on June

S.A., and Enel Iberoamérica, S.R.L. becoming the surviving

8, 2017 and from that date on, Enel SpA controlled Enel

entity with all legal rights, obligations, and third-party

Chile S.A. through Enel South America S.R.L.

relationships. On December 20, 2016, the agreement was

formalized and recorded in a public deed granted by the

On November 16, 2017, the merger of Enel South Amer-

Madrid Notary, Mr. Andrés Domínguez Nafría. The merger

ica S.R.L. with and into Enel S.p.A. was registered in the

was registered in the Commercial Register of Madrid and

Company Register of Roma, Republic of Italy. As a result

the Company's Shareholder Registry on February 13,

of the merger, Enel SpA was the surviving entity with all

2016, although the registration was retroactively effective

legal rights, and obligations of Enel South America S.R.L.

1: Total shares consider 967,520,599 shares of treasury stock generated by the process of withdrawal right carried out during the Elqui project.

Annual Report Enel Chile 2018Consequently, as of that date, Enel SpA directly controls

Enel SpA was registered in the Company Register of Roma,

Enel Chile S.A. (at the time with a 60.62% ownership

Republic of Italy on December 12, 2018.

share).

The merger of Hydromac Energy S.R.L. and Enel Hold-

Enel Holding Chile S.R.L with and into Enel SpA, as the

ing Chile S.R.L., companies that held 18.62% and 0.02%

surviving entity, all legal rights and obligations of Hydromac

shareholding in Enel Chile S.A. respectively, with and into

Energy S.R.L. and Enel Holding Chile S.R.L are transferred

As a result of the merger of Hydromac Energy S.R.L. and

to Enel SpA.

Consequently, as of December 12, 2018, Enel SpA increases its direct shareholding in Enel Chile S.A. to 61.93%.

Shareholders of Enel SpA at December 31, 2018

Ministero dell’Economia e delle Finanze de Italia

Other Investors (Institutional or Retail)

Total

23.6%

76.4%

100.0%

The shareholders of the controlling entity do not have a shareholders’ agreement.

Twelve Major Shareholders of the
Company at December 31, 2018:

Name
Enel SpA
Banco de Chile on behalf of nonresident third parties
Citibank N.A. (Circular 1375 S.V.S.)
Banco Itaú Corpbanca on behalf of foreign investors
Banco Santander on behalf of foreign investors
AFP Habitat S.A. Pension Fund C
AFP Provida S.A. Pension Fund C
AFP Cuprum S.A. Pension Fund C
AFP Capital S.A. Pension Fund C
Banchile C DE B S.A.
AFP Habitat S.A. Pension Fund A
AFP Habitat S.A. Pension Fund B
Subtotal 12 shareholders

Other 6,290 shareholders*

TOTAL 6,302 SHAREHOLDERS

Taxpayer ID.
59,243,980-8
97,004,000-5
59,135,290-3
97,023,000-9
97,036,000-K
98,000,100-8
76,265,736-8
76,240,079-0
98,000,000-1
96,571,220-8
98,000,100-8
98,000,100-8

Number of Shares
42,832,058,392
2,938,360,307
2,707,448,873
2,412,256,213
2,036,665,979
1,422,453,411
1,387,032,334
946,846,342
929,478,209
785,741,357
599,585,771
560,370,600
59,558,297,788

Shareholding
61.93%
4.25%
3.91%
3.49%
2.94%
2.06%
2.01%
1.37%
1.34%
1.14%
0.87%
0.81%
86.11%

9,608,259,431

13.89%

69,166,557,219

100.00%

*No current shareholders belong to families of the Company´s founders. The government nor any state-owned entity holds more than 5%
ownership of the Company.

Ownership and control

Most important changes in ownership share

NAME

Enel SpA

Citibank N.A. (Circular 1375 S.V.S.)

Banco de Chile on behalf of non-resident third
parties

Banco Itau Corpbanca on behalf of Foreign
Investors

Taxpayer ID.

59,243,980-8

59,135,290-3

N° of shares at
12/31/2017

N° of shares at
12/31/2018

29,762,213,531

42,832,058,392

3,477,135,400

2,707,448,873

97,004,000-5

2,889,586,476

2,938,360,307

97,023,000-9

2,345,100,592

2,412,256,213

Banco Santander on behalf of Foreign Investors

97,036,000-K

1,574,876,510

2,036,665,979

AFP Provida S.A.

AFP Cuprum S.A.

AFP Capital S.A.

AFP Habitat S.A.

Banchile C de B S.A.

Larraín Vial S.A. Stock Broker

AFP Modelo S.A.

BTG Pactual Chile S.A. Stock Broker

76,265,736-8

76,240,079-0

98,000,000-1

98,000,100-8

96,571,220-8

80,537,000-9

76,762,250-3

84,177,300-4

Santander Corredores de Bolsa Limitada

96,683,200-2

AFP Planvital S.A.

Credicorp Capital S.A. Stock Brokers

98,001,200-K

96,489,000-5

1,379,706,719

2,399,448,619

1,119,912,164

1,953,111,703

1,108,850,445

1,863,888,401

1,016,399,034

2,674,373,869

395,718,609

368,863,381

302,905,090

225,359,878

190,942,944

187,665,115

176,349,167

785,741,357

426,433,848

592,213,839

387,425,204

276,582,649

325,211,209

84,617,434

Variation
Shareholding
percentage points

1.3015

-3.1684

-1.6377

-1.2893

-0.2634

0.6587

0.5426

0.4361

1.7962

0.3300

-0.1348

0.2392

0.1011

0.0109

0.0879

-0.2369

Annual Report Enel Chile 2018
Stock market
transactions among
related parties
during 2018

There were no transactions among related parties during

2018.

Summary of comments
and proposals by the
Directors Committee
and shareholders

Enel Chile received no comments or proposals regarding

the progress of corporate businesses between January 1

and December 31, 2018, from the Directors’ Committee

or shareholders that own or represent 10% or more of the

shares issued with voting rights, in accordance with the

provisions of Article 74 of Law 18,046 and Articles 136 of

the Rules and Regulations to the Chilean Corporations Law.

Annual Report Enel Chile 201807

Management

Letter from the Chairman Board of Directors

Enel Chile is managed by a Board of Directors comprised of seven members for a three-year term and may be reelected.

The Board of Directors was elected at the Ordinary Shareholders’ Meeting held on April 28, 2016. As stated by the Chilean

Corporations Law, in the event of a vacancy, the Board must be totally renewed at the Company’s forthcoming Ordinary

Shareholders’ Meeting, and the Board may appoint a substitute in the interim. The Board does not have alternate mem-

bers.

1. CHAIRMAN
Herman Chadwick Piñera
Graduate of Legal and Social
Sciences
Pontificia Universidad Católica
de Chile
Lawyer
Taxpayer ID: 4,975,992-4
Since 04.25.2018

2. DIRECTOR
Giulio Fazio
Graduate of Legal and Social
Sciences
Universidad de los Estudios de
Palermo
Lawyer
Passport: YA 4656507
Since 04.25.2018

5. DIRECTOR
Daniele Caprini
Graduate of Economics
Università degli Studi di Siena
Universidad de LUISS-Rome
Passport: YA 9188092
Since 04.25.2018

6. DIRECTOR
Gerardo Jofré Miranda
Commercial Engineer
Pontificia Universidad Católica
de Chile
Taxpayer ID: 5,672,444-3
Since 04.25.2018

3. DIRECTOR
Salvatore Bernabei
Industrial Engineer
Università degli Studi di Roma
“Tor Vergata”
Master’s Degree in Business
Administration
Politécnica di Milano
Passport: YB 0600187
Since 04.25.2018

7. DIRECTOR
Pablo Cabrera Gaete
Graduate of Legal and Social
Sciences
Pontificia Universidad Católica
de Chile
Diplomat
Academia Diplomática Andrés
Bello
Taxpayer ID: 4,774,797-K
Since 04.25.2018

4. DIRECTOR
Fernán Gazmuri Plaza
Commercial Engineer
Pontificia Universidad Católica
de Chile
Taxpayer ID: 4,461,192-9
Since 04.25.2018

Over the last few years the
following individuals were also
directors of Enel Chile:

Vincenzo Ranieri
Graduate of Business
Administration
Universidad de LUISS- Rome
Passport: YA 7616919
From 04.28.2016
Until: 02.28.2018

Annual Report Enel Chile 2018Board of Directors’ and Directors’
Committee Compensation

Under Article 33 of Law 18,046, the Chilean Corporations

The compensation of the Directors’ Committee is a month-

Law, the Ordinary Shareholders’ Meeting held on April 25,

ly payment that includes an unconditional amount equal to

2018 approved the compensation of the Board of Directors

72 UF and an additional 26.4 UF per session attended with

and Directors’ Committee for 2018.

a maximum of 16 sessions in total, either ordinary or ex-

traordinary within each fiscal year.

The compensation of the Board of Directors consists of a

monthly compensation paid to each director. A portion of

The total compensation expense during 2018 amounted to

such monthly payment is unconditional and equal to 216

Ch$ 547,524,550 and is detailed in the following table.

Unidades de Fomento (UF in its Spanish acronym) Chilean

inflation-indexed, Chilean peso-denominated monetary

unit, and an additional 79.2 UF per session attended with

a maximum of 16 sessions in total, either ordinary or ex-

traordinary.

Board of Directors’ compensation in 2018

Figures in Ch$

Board Member Name

Position

Fixed
Compensation

Ordinary and
Extraordinary
Sessions

Committee’s
Fixed
Compensation

Herman Chadwick Piñera

Chairman

133,016,070

48,772,559

Giulio Fazio (1)

Salvatore Bernabei (1)

Vincenzo Ranieri (1)

Fernán Gazmuri Plaza

Director

66,508,035

24,386,279

22,175,787

8,841,872

Juan Gerardo Jofré Miranda Director

66,508,035

24,386,279

22,175,787

8,841,872

Pablo Cabrera Gaete

Director

66,508,035

24,386,279

22,175,787

8,841,872

Total

332,540,174

121,931,397

66,527,362

26,525,616

(1) The Directors waived their compensation for being an executive of the Enel SpA Group

Directors
Committee
Ordinary and
Extraordinary
Sessions

Variable
Compensation

TOTAL 2018

181,788,628

121,911,974

547,524,550

The total compensation expense for 2017 was Ch$ 530,674,977 and is detailed in the following table. The Board of Direc-

tors did not have additional expenses for consulting services.

Management

Board of Directors’ compensation in 2017

Figures in Ch$

Board Member Name

Position

Fixed
Compensation

Ordinary and
Extraordinary
Sessions

Committee’s
Fixed
Compensation

Directors
Committee
Ordinary and
Extraordinary
Sessions

Variable
Compensation

Herman Chadwick Piñera

Chairman

114,858,878

63,205,976

Giulio Fazio (1)

Salvatore Bernabei (1)

Vincenzo Ranieri (1)

Fernán Gazmuri Plaza

Juan Gerardo Jofré
Miranda

Pablo Cabrera Gaete

Total General

Director

57,429,439

31,602,988

19,143,146

9,361,134

57,429,439

31,602,988

19,143,146

9,361,134

57,429,439

31,602,988

19,143,146

9,361,134

287,147,196

158,014,940

57,429,439

28,083,402

(1) The Director waived his compensation for being an executive of the Enel SpA Group

Incentive plan

Director's compensation for 2018 did not include an incen-

tive plan.

Diversity in the
Board of Directors

Number of people by gender:

Board of Directors'
consulting expenses

The Board of Directors did not spend on consulting ser-

Female

Male

Total

vices in 2018.

TOTAL 2017

178,064,854

117,536,707

530,674,977

Annual Report Enel Chile 2018
Number of people by nationality:

Chilean

Italian

Total

Number of people by age group:

Between 41 and 50 years

Between 51 and 60 years

Between 61 and 70 years

More than 70

Total

Number of people by years of service:

Less than 3 years

From 3 to 12 years

More than 12 years

Total

Ownership in
Enel Chile S.A.

As of December 31, 2018, according to the shareholder's

the Company.

Directors’ Committee

On April 25,2018, the Ordinary Shareholders´ Meeting ap-

pointed the members to the Board of Directors. On that

same date, after the shareholders´meeting, the Board of

Directors designated Mr. Fernán Gazmuri Plaza, Mr. Ge-

rardo Jofré Miranda and Mr. Pablo Cabrera Gaete as mem-

bers to the Directors' Committee, all independent directors

as defined by Article 50 bis of the Chilean Corporations

Law 18,046. Mr. Fernán Gazmuri Plaza was appointed fi-

nancial expert and Chairman of the Directors’ Committee

during the ordinary session of the Directors’ Committee

and Mr. Domingo Valdés Prieto was appointed Secretary

to the Directors’ Committee.

Annual
Report

The Directors’ Committee of the Company held 13 ses-

sions during 2018, including the present session, therefore

fully complying with the obligations established in Article

50 bis of the Chilean Corporations Law 18,046 and addi-

tional applicable regulation.

During 2018, the Directors’ Committee addressed the mat-

ters that are summarized below:

1.- Financial statements:

During the session held on February 27, 2018, the Di-

rectors' Committee analyzed the financial statements

to register the Company and its shares in the SVS and

unanimously agreed to approve the Combined Finan-

cial Statements as of December 31, 2017, including

its notes, significant events as well as the respective

external auditors´ reports and account inspectors´ re-

ports.

During the extraordinary session held on May 4, 2018,

the Directors’ Committee unanimously declared hav-

ing examined the Consolidated Financial Statements

of the Company as of March 31, 2018 and its Notes,

Income Statement and Significant Events.

During the ordinary session held on May 28, 2018, the

Directors’ Committee unanimously declared having

examined the Consolidated Financial Statements of

the Company as of March 31, 2018 and a limited audit

review report, under the PCAOB standard, performed

by EY Audit SpA.

During the same session, the Directors’ Committee

unanimously resolved declaring having examined the

Proforma Consolidated Financial Statements of Enel

Chile as of December 31, 2017, and its Notes.

During the ordinary session held on July 26, 2018,

the Directors’ Committee unanimously declared hav-

ing examined the Consolidated Financial Statements

of the Company as of June 30, 2018 and its Notes,

Management
Income Statement and Significant Events, and also

Additionally, inform on the company and its subsid-

declared having examined the Consolidated Financial

iaries´ compliance with tax related obligations. Con-

Statements of Enel Green Power Latin America as

sequently, EY was still required to inform on internal

of March 31, 2018, which merged with and into Enel

control issues detected while performing the external

Chile S.A.

audit. The revocation of the rules did not affect the

deadline established by the Financial Market Commis-

During the extraordinary session held October 30,

sion (CMF in its Spanish acronym) rule NCG No 30

2018, the Directors’ Committee unanimously de-

to submit the Financial Statements and consequent-

clared having examined the Consolidated Financial

ly it was understood that the internal control report,

Statements of Enel Chile as of September 30, 2018,

as part of the information to be submitted, should

and its respective Notes, Income Statement and Sig-

be provided by the external auditors during the first

nificant Events and the report regarding related party

quarter of each year to be available for the review and

transactions prepared by the external auditors.

approval of the annual financial statements. During

2. External Auditors’ report on bank transfers and

to state that the directors, unanimously, had formally

money brokerage: During the session held on Feb-

and expressly taken note of the Internal Control Letter

ruary 27, 2018, the Directors’ Committee unanimous-

dated February 27,2018, prepared by Ernst & Young

this same session, the Directors´ Committee agreed

ly agreed to acknowledge that they had formally and

to comply with regulation.

expressly noted the report on money brokerage and

bank transfers prepared by Ernst & Young, the ex-

4. Directors’ Committee Budget: On February 27,

ternal auditors of Enel Chile S.A., dated February 27,

2018, the Directors' Committee unanimously agreed

2018.

to approve the Directors’ Committee 2018 Budget

amounting to 10,000 UF for the Committee and its

3. Examination of internal control letter SVS Cir-

consultants’ expenses and operations. The members

cular 422: The Directors´ Committee examined the

of the Directors’ Committee also unanimously decid-

subject during the ordinary session held on February

ed to submit this 2018 Directors’ Committee Budget

27, 2018. On December 6, 2007, the Financial Market

proposal to the approval of the Board of Directors so

Commission issued Circular 422, which supplements

that, if approved, they submit it to the Ordinary Share-

Circular 980 dated December 24, 1990. This Circular

holders Meeting for final approval as required.

offers specific instructions on internal control proce-

dures, providing for the submission of a provisional

5. External auditors’ examination of subjects cov-

report and a broad time frame for the external auditors

ered by NCG 385: During the ordinary session held

to submit a final internal control report, allowing it to

on February 27, 2018, the Directors' Committee

be delivered until the date in which the Board of Di-

unanimously declared having examined the subjects

rectors takes note of the Financial Statements at year

voluntarily presented, as good corporate governance,

end of each fiscal year. The President of the Directors´

included in numeral 1 d) of the SVS General Norm

Committee, Mr. Fernán Gazmuri Plaza, stated that the

385 based on the presentation performed by Exter-

rules referred to above had been revoked, but even

nal Auditors and highlighted that none of the subjects

so, Article 246 of the Securities Market Law, among

referred to by items ii, iii and v of such numeral had

other issues, establishes that the external auditors are

taken place.

responsible for informing the Board of Directors and

the Directors´ Committee on the deficiencies regard-

6. External auditors’ fees in fiscal year 2017: During

ing accounting practices, management systems and

the ordinary session held on January 30, 2018, the

internal auditing practices detected while performing

Directors' Committee unanimously agreed to declare

the external audit. Also, identify the discrepancies be-

having examined the fees paid during 2017 by the

tween the accounting practices used by the Compa-

Company to the external auditing firms concluding

ny in its Financial Statements and the relevant criteria

that they had not affected the competence nor the

generally applied in the company´s specific industry.

independence of such firms.

Annual Report Enel Chile 2018Directors' Committee unanimously declared having

7. External auditors’ fees in fiscal year 2017 and es-

examined the Related Party Transactions with Enel

timate for 2018: During the ordinary session held on

Green Power Chile that consist of: (i) the guarantees

February 27, 2018, the Directors' Committee unan-

granted by Enel Chile to back up Enel Green Power

imously agreed to declare having examined the fees

Chile and its subsidiaries´ obligations, replacing the

paid during 2017 by the Company to the different audit-

ones granted by Enel SpA, and (ii) a contract in which

ing firms hired and also having analyzed the estimate of

Enel Chile S.A. provides Enel Green Power Chile or

recurrent auditing service fees for 2018.

any of its subsidiaries with credit letters, standby

credit letters, comfort letters, corporate guarantees

8.- Supervision and evaluation of external auditors:

and bank guarantees to back up its obligations for

During the ordinary session held February 27, 2018,

up to a total US$ 30 million with a 3 year renewable

the Directors' Committee unanimously agreed to eval-

credit line. Enel green Power Chile is to compensate

uate the work performed in 2017 by the Company´s

Enel Chile for each guarantee granted. The Directors´

external auditors, Ernst & Young, as reasonable.

Committee declared that the transactions examined

contributed to the best interest of the Company and

9.- Services to be rendered by external auditors:

adjusted in price, terms and conditions to those pre-

During the ordinary session held January 30, Febru-

vailing in the market at the time of its approval.

ary 27, March 29, May 28, July 26, October 30 and

November 29 and in the extraordinary session held

12.- 12. Proposed Private Risk Rating agencies: During

May 4, all in 2018, the non-recurrent services to be

the ordinary session held on February 27, 2018, the

rendered by the external auditors were examined. The

Directors’ Committee unanimously agreed to propose

Committee unanimously agreed to declare that such

to the Company’s Board of Directors to suggest Feller

services do not compromise the technical compe-

Rate Clasificadora de Riesgo Limitada and Fitch Chile

tence nor the independent judgement of the respec-

Clasificadora de Riesgo Limitada to the shareholders

tive external auditing firms, as stated in Section 202

meeting as the local private risk rating agencies and

of the Sarbanes Oxley Act, in the last paragraph of

Standard & Poors International Rating Services and

Article 242 of the Capital Markets Law 18,045 and in

Moody´s as the international private risk rating agen-

the Directors´ Committee Regulations.

cies for fiscal year 2018.

During session held on August 31, 2018, the Direc-

13.- Proposed External Auditors: During the ordinary

tors' Committee unanimously agreed to declare hav-

session held on March 29, 2018, the Directors’ Com-

ing examined the appointment of BDO as the external

mittee unanimously agreed to propose to the Com-

auditor to provide the calculation of inflation adjust-

pany’s Board of Directors to propose to the Ordinary

ments to the Gasoducto Atacama Chile Branch.

Shareholders’ Meeting the following auditing firms, in

the order of preference presented, as the external au-

10.- 10. 20-F Form submitted to the SEC (Securities

ditor firm of Enel Chile S.A. for 2018: 1-E&Y; 2-BDO;

and Exchange Commission of the United States

3-PKF and 4-RSM. The arguments considered rele-

of America): During the ordinary session held on

vant in proposing E&Y in first place as external audi-

April 25, 2018, the Directors' Committee unanimous-

tor of the Company are the following: (i) it presented

ly declared having examined the financial statements

the most competitive proposal based on the technical

under IFRS to be included in the 20-F Form to be pre-

and economic evaluations performed on the proposals

sented to the Securities and Exchange Commission

received; (ii) it is highly qualified in terms of available

of the United States of America in compliance with

resources and experience in the electricity sector; (iii)

the rules and requirements of the SEC regarding se-

it is one of the four most important external auditing

curities issued in the United States of America.

firms on the national and international level; (iv) it is the

external auditing firm with greatest synergies with Enel

11.- 11. Examination of related party transactions:

Chile S.A. because E&Y is the main external auditing

During the ordinary session held on May 4, 2018, the

firm of Enel SpA, Enel Chile´s controlling shareholder.

Management
the Directors' Committee, unanimously declared hav-

14.- 14. Approval of external auditor contracts: During

ing examined the compensation plan of senior execu-

the extraordinary session held May 4, 2018, the Di-

tives, managers and employees of the Company.

rectors' Committee unanimously agreed to declare

having examined and approved the contract to be sub-

17.- Self-evaluation and Company´s internal control re-

scribed between Enel Chile S.A. and external auditors

view: During the ordinary session held July 26, 2018,

Ernst & Young.

the Directors' Committee, unanimously declared

having examined the internal controls self-evaluation

15.- 15. Analysis of Ethics Channel complaints: During

structure and procedures of Enel Chile S.A.

the ordinary session held January 30, 2018, the Di-

rectors' Committee, unanimously, gave its opinion on

18.- Various other matters: During the ordinary session

each one of the complaints received, offering guide-

held March 29, 2018, the Chairman of the Directors´

lines on how to proceed with each complaint and con-

Committee Mr. Fernán Gazmuri Plaza proceeded to

firming what had been already resolved by the Com-

report on his meeting with Enel SpA´s Collegio Sinda-

mittee. In this regard, the Chairman of the Directors'

cale to discuss the Committee´s main concerns and

Committee is to summon an extraordinary session if

listen to the matters that concern the Collegio.

he considers that it is necessary to resolve a certain

complaint.

During the ordinary session held July 26, 2018, the

Directors' Committee unanimously, agreed to recom-

During the same session, the Chairman of the Direc-

mend the Board of Directors of Enel Chile S.A. to give

tors' Committee, Mr. Fernán Gazmuri Plaza, request-

consent to EY, the external auditors, to make all docu-

ed that a benchmark analysis be performed with other

mentation pertinent to the external audit performed by

countries in which the Enel Group has operations to

EY to the Consolidated Financial Statements of Enel

determine the number of complaints that are normal-

Chile S.A. available to the Public Company Account-

ly received through the Ethics Channel. The Director,

ing Oversight Board (PCAOB) of the United States of

Mr. Gerardo Jofré, requested a benchmark analysis

America and to answer all the questions they have re-

with other companies in the country because he con-

garding such documentation, as requested by EY. EY

sidered the number of complaints to be low. The re-

stated that such documentation would not be distrib-

quests were approved by the Committee and were

uted nor used for any other purpose, without previous

transferred to the Internal Audit Officer of the Compa-

explicit approval by the Company and confirmed that

ny.

the PCAOB is obliged by law to maintain confidential-

ity of actions and information.

During the ordinary session held August 31, 2018, the

Directors´ Committee, unanimously, gave its opinion

on every complaint received, as indicated in the pre-

vious paragraph. In this same session, the Chairper-

son of the Directors´ Committee Mr. Fernán Gazmuri

Plaza proposed evaluating the convenience of legally

prosecuting the individuals who commit a crime. His

proposal was approved by the Committee.

Enel Chile S.A.
Directors’ Committee
Expenses

The Directors’ Committee did not spend its operational

expense budget approved by the Ordinary Shareholders

16.- 16. Examination of the Company´s compensation

Meeting held April 25, 2018.

plan for senior executives, managers and employ-

ees: During the ordinary session held June 21, 2018,

Annual Report Enel Chile 2018

ManagementOrganizational structure

C h a i

r m a n

H e r m a n C h a d w i c k P i ñ e r a

e m e n t

M a

P lanning and Control Officer
Claudia Navarrete Campos (5)

People and Organization Officer
Liliana Schnaidt Hagedorn (3)

R egulation Officer
Mónica de Martino

S afety Officer
Andrés Pinto Bontá

General Counsel
Domingo Valdés Prieto
Communications Officer
José Miranda Montecinos
Digital Solutions Officer
Angel Barrios Romo
Procurement Officer
Juan José Bonilla Andrino (4)

i v e O f fi c e r
t i ( 1 )

c u t
f E
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t i o n a l A f
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e

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P

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R

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t
s
e l a
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A

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( 2 )

, F i n a n c e a n d C o n t r o l
r s O f fi c e r
f a i
z ú a F r e i
t y a n d C o m m u n i t y
i
l
i n a b i
O f fi c e r
i n i
t i o n s
P e l l e g r
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o
O f fi c e r
n D u n s m o r e M o r e i r a
s
O f fi c e r
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a ff a

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(1) Was appointed on 10.01.2018 to re pla c e N ic ola C
(3) Was appointed on 02.01.2018 to re pla c e A lain R
(2) Was appointed on 10.01.2018 to re pla c e R
(4) Was appointed on 01.01.2018 to re pla c e A
(5) Was appointed on 08.01.2018 to re pla c e B r u

C h a i

r m a n

H e r m a n C h a d w i c k P i ñ e r a

e m e n t

M a

i v e O f fi c e r

t i ( 1 )

c u t

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h i e

, F i n a n c e a n d C o n t r o l

( 2 )

e m e n t

e l o D e J e s ú s

M a

r s O f fi c e r

O f fi c e r

P lanning and Control Officer

Claudia Navarrete Campos (5)

People and Organization Officer

Liliana Schnaidt Hagedorn (3)

t y a n d C o m m u n i t y

R egulation Officer

Mónica de Martino

S afety Officer

Andrés Pinto Bontá

t i t

I n

f a i

t i o n a l A f

z ú a F r e i

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i n a b i

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e ll a

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P e l l e g r

i n i

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n D u n s m o r e M o r e i r a

O f fi c e r

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f f

I n

General Counsel

Domingo Valdés Prieto

Communications Officer

José Miranda Montecinos

Digital Solutions Officer

Angel Barrios Romo

Procurement Officer

Juan José Bonilla Andrino (4)

Senior Executives

1. CHIEF EXECUTIVE OFFICER
Paolo Palloti
Electronic Engineer
Universidad de Ancona
Leadership for energy executive program
Harvard Business School
Taxpayer ID: 26,102,661-9
Since 10.01.2018

6. REGULATION OFFICER
Mónica de Martino
Political Science Degree
Universidad Luis LUISS Guido Carli. Roma
Executive MBA Columbia Business School. NY. and
London Business School. London
Taxpayer ID: 25,629,782-5
Since 05.31.2017

10. SUSTAINABILITY AND COMMUNITY RELATIONS
OFFICER
Antonella Pellegrini
Marketing and Communications Degree
European Design Institute
Roma – Italy
Taxpayer ID: 23,819,804-6
Since 05.31.2017

2. MANAGEMENT, FINANCE & CONTROL OFFICER
Marcelo de Jesús
Business Administration
USCS/ Brazil
Master Business Administration (MBA)
Fundação Dom Cabral
Taxpayer ID 26,562,488-k
Since 11.01.2018

3. PEOPLE AND ORGANIZATION OFFICER
Liliana Schnaidt Hagedorn
Industrial Engineer
Pontificia Universidad Católica de Chile
Taxpayer ID: 13.903.626-3
Since 02.01.2018

4. INTERNAL AUDIT OFFICER
Raffaele Cutrignelli
International Business Degree
Nottingham Trent University (United Kingdom).
Master in Auditing and Internal Controls
Universidad de Pisa (Italy)
Diploma in Strategy. Innovation. Management and Leadership
Massachusetts Institute of Technology (MIT)
Taxpayer ID: 25,553,336-3
Since 10.01.2016

5. GENERAL COUNSEL AND SECRETARY TO THE
BOARD
Domingo Valdés Prieto
Lawyer
Universidad de Chile
Master of Law
University of Chicago
Taxpayer ID: 6,973,465-0
Since 02.29.2016

7. PROCUREMENT OFFICER
Juan Jose Bonilla Andrino
Industrial Engineer
Escuela Superior Ingenieros Industriales Madrid.
Universidad Politecnica/ Technische Universitat Berlin
(Germany). 01.09.2003.
Master Business Administration MBA. ESERP Business
School. 07.01.2010.
Master Business Administration. San Pablo CEU University.
07.01.2014.
Master in Executive Business. Massachusetts Institute of
Technology. Boston. USA
Taxpayer ID: 25,566,577-4
Since 01.01.2018

8. COMMUNICATIONS OFFICER
José Miranda Montecinos
Audiovisual Communicator with a degree from DUOC UC
Management Skills Diploma. Universidad de Chile
Corporate Entrepreneurship and Open Innovation, Berkeley
University.
Taxpayer ID: 15,307,846-7
Since 02.29.2016

9. INSTITUTIONAL AFFAIRS OFFICER
Pedro Urzúa Frei
Journalist
Universidad de Artes y Ciencias de la Comunicación
Taxpayer ID: 11,625,161-2
Since 02.29.2016

11. SAFETY OFFICER
Andrés Pinto
Industrial Engineer
Pontificia Universidad Católica de Chile
Diploma in Chemical Engineering
Pontificia Universidad Católica de Chile
Taxpayer ID: 13,686,119-0
Since 05.31.2017

12. PLANNING AND CONTROL OFFICER
Claudia Navarrete Campos
Civil Engineer
Pontificia Universidad Católica de Chile
Master’s in Engineering and MBA
Pontificia Universidad Católica de Chile
Taxpayer ID: 12,494,825-8
Since 08.01.2018

13. DIGITAL SOLUTIONS OFFICER
Ángel Barrios
Computer Science Engineer
Universidad Federico Santa María
Master’s in Information Technology
Universidad Federico Santa María
Taxpayer ID: 10,761,436-2
Since 01.30.2018

14. SERVICES OFFICER
Alison Dunsmore Moreira
Civil Engineer
Universidad de Santiago de Chile
Taxpayer ID: 13,848,428-9
Since 05.01.2018

Management

Annual Report Enel Chile 2018Severance Payments
to Managers and
Senior Executives

The severance payments for years of service of senior ex-

ecutives and managers that left the company amounted to

Ch$ 391.4 million in 2018.

Shareholdings
in Enel Chile

Based on the shareholder's register, as of December 31,

2018, no senior executive owned shares of the Company.

There are no requirements regarding the ownership of

company shares by the chief executive officer or senior ex-

ecutives. What is mandatory by the Securities Market Law

and the Manual of Information of Interest to the Market,

is that the CEO and senior executives inform their share

position and the respective transactions.

Management of
main subsidiaries

Enel Generación Chile
Valter Moro
Mechanical Engineer
Universidad Politécnica de Marche Italia

Enel Distribución Chile
Ramón Francisco Castañeda Ponce
Industrial Engineer
Pontificia Universidad Católica de Chile

Senior Executive and
Manager Compensation

During 2018, the compensation and benefits received by

the chief executive officer and senior executives of the

Company amounted to a fixed compensation of Ch$ 2,734

million and Ch$ 707 million in variable compensation and

benefits.

This amount included managers and senior executives that

held their position in the Company at year-end and also

those who left the company during the respective year.

Benefits for Senior
Executives and
Managers

The company maintains complementary health insurance

and catastrophic insurance coverage for senior executives

and their accredited dependents. The company also has

life insurance coverage for each senior executive. These

benefits are granted according to the management level of

each employee at the time executed.

In 2018, the amount spent on these benefits was Ch$ 58

million, which is included in the compensation received by

senior executives.

Incentive Plans and
Senior Executives

Enel Chile has an annual bonus plan for its executives

based on achieving objectives and the level of individual

contribution to the company’s results. This plan defines a

bonus range for each management or hierarchical level.

Executive bonuses are expressed as a specific number of

monthly gross salaries.

Management42

Annual Report Enel Chile 201808

People and
Organization

Letter from the Chairman Enel Chile

Enel Chile

191

260

451

Enel Chile

423

451

Enel Chile

164

167

451

Enel Chile

202

451

Workforce

Years of Service

Less than 3 years

Between 3 and 6 years

More than 6 and less than 9 years

The employees per category of Enel Chile and its subsidiar-

Between 9 and 12 years

ies and jointly controlled entities as of December 31, 2018

are the following:

Manage-
ment
and
Senior
Execu-
tives

Profes-
sionals
and tech-
nicians

Employ-
ees and
others

393

660

156

622

Total

451

767

163

681

1,831

174

2,062

Company

Enel Chile

Enel Generación (1)

Enel Green Power (2)

Enel Distribución (3)

Total general

(1) Includes Pehuenche, GasAtacama Chile and GasAtacama Argentina
(2) Includes Electrica Panguipulli and Geotérmica del Norte
(3) Includes Empresa Eléctrica de Colina and Luz Andes

Diversity

Diversity of the Chief Executive Office and other depart-

ments that report to the CEO or Board of Directors

More than 12 years

Total

Diversity in the organization
Gender

Female

Male

Total

Nationality

Argentine

Brazilian

Chilean

Colombian

Costa Rican

Spanish

Italian

Peruvian

Venezuelan

Total

Age

Less than 30 years

Between 30 and 40 years

Between 41 and 50 years

Between 51 and 60 years

Between 61 and 70 years

Enel Chile

Total

Gender

Female

Male

Total

Nationality

Brazilian

Chilean

Spanish

Italian

Total

Age

Less than 30 years

Between 30 and 40 years

Between 41 and 50 years

Between 51 and 60 years

Between 61 and 70 years

Total

Enel Chile

Years of Service

Less than 3 years

Between 3 and 6 years

More than 6 and less than 9 years

Between 9 and 12 years

More than 12 years

Total

Average fixed salary of women compared to men within

the same professional category

Categories

Senior Management

Professional-Level 1

Professional-Level 2

Professional-Level 3

Administrative-Level 1

Administrative-Level 2

Administrative-Level 3

80%

102%

91%

79%

90%

93%

117%

Annual Report Enel Chile 2018Human
resources
activities

Labor relations

The company has continued having periodic meetings with

the Unions in 2018, strengthening an open, frank and unre-

stricted dialogue with employee representatives and main-

taining a good work climate.

Safety measures and
occupational health

Safety and occupational health goals are closely linked to

Enel Chile´s business. Given the nature of the business,

it is exposed to critical risks. The company, in its ongoing

improvement process, plays a leadership role at integrat-

ing safety and occupational health into every level and any

activity developed. The priority of safety and occupational

health is key in corporate management due to its strategic

importance.

Health dissemination and
promotion

This program aims to educate and train workers carrying

out activities that promote quality of life through massive

dissemination efforts, such as posters, graphic material

and emailed information. Among each month’s topics are:

> March: Anti-stress campaign offering practical rec-

ommendations to eliminate its causes.

> April: Widespread immunization campaign to prevent

the seasonal flu.

> May: Anti-tobacco campaign offering advice to pre-

vent tobacco consumption.

June: Colon and gastric cancer campaign encourag-

ing the population to perform an annual preventive

exam to detect these illnesses opportunely.

July: Respiratory disease and viral infections preven-

tion campaign.

> August: Heart care campaign, advise regarding heart care.

September: Prostate and cervical cancer campaign

encouraging preventive exams for timely detection of

these diseases.

> October: Breast cancer prevention campaign promot-

ing early detection and self-examination.

> November: Healthy Diet Campaign recommending

practical nutrition habits to improve the quality of life.

> December: Skin Cancer Campaign with advice re-

garding ultraviolet radiation and other harmful agents..

People and OrganizationActivities for Enel Chile
Group employees

Immunization Program

Cardiovascular risk
program

The objective is to care for employees with cardiovascular

risks based on the results of preventive exams, through

specific fitness programs and nutritional evaluation con-

The immunization of Enel Chile´s employees is a preventive

measure that focuses on preventing recurrent contagious

trols.

Workplace gymnastics
program

The workplace gymnastics program is an innovative exer-

cise program that contributes to prevent workplace illness-

es, such as, stress, tendinitis, lumbago, carpal tunnel syn-

drome, neck and extremity pain., among others..

illnesses.

Seasonal Trivalent Influenza Vaccine: Performed during the

first quarter of the year to prevent the outbreak that begins

In June.

Preventive medical exams
program

The objective is to perform periodic medical evaluations for

the early detection of potential Illnesses. This Initiative focus-

es on all Company employees and is carried out following a

protocol defined according to gender and age.

Annual Report Enel Chile 2018Workplace climate
management

In Enel Chile, feedback between managers and employ-

ees creates closer bonds, increases transparency, aligns

expectations, and supports employees’ professional devel-

opment. Fostering a culture of continuous feedback devel-

ops our employees’ talents and leads the way towards the

Work climate management and commitment are funda-

formation of high performing teams.

mental pillars of Enel Chile´s strategy. In 2018, 93% of em-

ployees in Chile participated in the workplace climate and

During 2018 the program “Recognizing Ourselves”, con-

safety survey, which is performed twice a year. The com-

tinued seeking to encourage a culture of recognition within

pany’s work environment is a priority due to its close rela-

the Company. On the one hand, the “Recognizing People

tionship with the company’s human resource. Therefore,

Program” offers formal instances for workers to recognize

we have continued with initiatives related to leadership,

their teammates, and on the other hand, the “Recognizing

communication, meritocracy and development, conflict

Contributions Program” offers the organization a chance to

resolution measures, and good work practices to maintain

identify initiatives that have added great value to the com-

workers’ motivation, satisfaction and commitment.

pany. The company continued with the ceremonies to rec-

ognize workers and their professional career path, among

The Team Building programs are worth highlighting. They

other initiatives.

are collaborative work experiences that focus on develop-

ing team work competencies to strengthen trust and align

The Company also continued the program “Agent of

objectives to reach common goals.

Change” in 2018, with the participation of a team of more

than 50 employees from all Group companies. This team

Enel Chile has a program that aims towards promoting and

developed cultural change initiatives that facilitate the im-

reinforcing the important role of managers in creating or-

plementation of projects by promoting collaboration and in-

ganizational environments that foster workers’ satisfaction

novation. Each team had a company manager as a sponsor,

and development. “Leader to Coach” is a program that

to support and direct their initiatives, linking the technical

was designed to encourage leadership and the role of the

project to the cultural change initiatives required to imple-

manager in our “Open Power” culture from a strategic and

ment projects.

active standpoint that focuses on the mobilization of teams

and the ability to help the learning process of others. It is a

comprehensive coaching program, which builds an individ-

ual itinerary for each manager, including 360° evaluation,

skill training workshops, and building a network of good

practices in human resource management.

Enel Chile has implemented a set of communication initia-

tives under the title “People & Organization” to guarantee

ongoing communication with workers on different matters

of interest related to human resource management. Activ-

ities include updating and adding value to the website, the

manual of good practices, and monthly bulletins for manag-

ers and workers, among others.

There are several programs that aim towards meritocracy

and development. Professional development is managed

by offering promotions based on merit, and job opportuni-

ties both locally and abroad, wherever the Group is present.

Diversity

As part of the Company’s Diversity and Inclusion Policy,

Enel Chile has developed several practices addressing gen-

der, age, nationality, and disability. This policy promotes

the principles of non-discrimination, equal opportunities,

inclusion and work-life balance as fundamental values.

The Policy has established three main principles:

1. Reject any and all forms of arbitrary discrimination and

ensure and promote diversity, inclusion, and equal op-

portunities.

2. Promote and maintain an environment of respect for

people’s dignity, honor and identity.

People and Organization3. Ensure the highest confidentiality standards regard-

ing any information about worker’s private life that the

Company could have access to.

Work-Life integration
measures and flexibility

In terms of gender, a balance is sought out in the initial

phase of the recruitment and selection processes and a

Regarding conciliation and flexibility, in 2018, the remote

relationship with universities and professional institutes is

working program “Smart Working” has grown to become

established to promote the participation and inclusion of

one of the most appreciated conciliation measures in the

women.

company, providing employees with greater flexibility

when it comes to the execution of their work. Today, we

Moreover, pregnant women have participated in the “Par-

have 360 workers in the program, of which 169 choose

enting Program”, which seeks to increase the value of ma-

to work from home, or wherever they please, one day a

ternity and balance out the needs of parenting with profes-

week (from Tuesday to Thursday), but must comply with

sional development needs. Actions taken by the program

the safety and health measures established by current leg-

include activities for women’s healthcare and wellbeing,

islation. This initiative contributes to the balance between

speeches regarding the impact a child may have on fam-

work and family life and improves quality of life.

ily dynamics, and the creation of trust between pregnant

workers and the Company.

Additionally, the following initiatives, among others, were

carried out to improve worker’s quality of life:

In terms of age and taking advantage of the Company´s

digital transformation, this year we implemented a new

Sports and Culture Extension Program: traditional sports

On-Boarding platform. Every employee of Enel may antic-

program that takes place within the Company’s facilities,

ipate his or her contact and knowledge of the Company

offering workshops and the practice of several sports, such

by using this platform and therefore facilitating work and

as soccer, baby soccer, basketball, volleyball, and other

cultural adaptation. This personal and professional support

sports. Other extension activities designed for employees

allows Enel employees to understand what his or her daily

and their families include artistic workshops, expositions,

work dynamics will be.

family excursions and trips, among others.

Regarding nationality, expatriates are assigned a tutor to

There are several activities for employees’ children, both

assist and support them throughout the length of their

recreational and educational. These include the summer

stay. It helps recognize, respect, and manage the cultural

and winter camps for youngsters between 6 and 15 years

differences between different nationalities and stimulate

of age that are offered in January and during winter hol-

their integration.

idays. There are also training workshops held during the

summer for employee family members.

Regarding disabilities, we have supported the Company´s

disabled employees in obtaining their disability creden-

Several events were held to foster the balance between

tials as established by law, so as to facilitate recognition,

work and family life. The Christmas Party is among the

respect and management of different employee disabili-

most relevant of these events for workers with children

ties. We also continued performing structural adjustment

and also the “Come to my birthday party” that is celebrat-

to Company facilities (casino, bathrooms, ramps, special

ed at the corporate stadium for kids age 12 and under.

parking, auditorium entrance ways, elevators with braille,

etc.).

Other important events include the End of the Year party,

a corporate event for all employees consisting of a dinner

with contests and dancing, and the “Career Trajectory

Award”, an annual corporate celebration that recognizes

workers who have been with the Company for at least 20

years.

Annual Report Enel Chile 2018Filling job openings

Enel Chile´s main goal is to hire the best professionals,

those who have the competences needed to face the cul-

tural changes that arise as a consequence of the Compa-

ny’s digital transformation and Open Power.

During 2018, there were 56 job openings, 38% were filled

with candidates from within the Company, 43% were as-

signed to women. Additionally, of all workers hired from

outside the Company in 2018 (54% of the total available

positions in Enel Chile), 47% were women.

Internships and young
talent program

This project is worth mentioning because it is a new re-

cruitment method to hire young professionals from the

best universities in the country. They are offered the op-

portunity to consolidate their academic knowledge of Enel

Chile´s business as interns and become trainied profession-

als who are familiar with the Group’s reality and challenges.

This internship program is carried out permanently through-

out the year, although the greatest number of interns are

received during the summer. During 2018, 45 interns were

part of this Enel Chile program of which 42% were women.

In Enel Chile, 47% of internships were offered in the Glob-

al Digital Solutions department, 33% in Procurement and

20% in Staff and Services.

People and OrganizationDiversity and inclusion

To encourage diversity in all of its forms, we highlight the

increasing participation of women in internal contests,

gradually promoting women’s empowerment and leader-

For Enel Chile, diverse work teams and an inclusive work

ship. It is worth noting that out of the total external admis-

environment are essential to create a culture of innova-

sions, 47% were women.

tion. Diversity grants the possibility of visualizing different

points of view and opinions that enrich the work environ-

This year we have implemented the On-Boarding program,

ment, adding value to the business.

in which each worker hired by Enel Chile must be accom-

panied by a tutor who offers professional and personal

We value differences and transform them into our compet-

support, guidance on the day to day dynamics of the com-

itive advantage; by stimulating creativity, flexibility, learning

pany, and helps creating networks that will allow feeling

and respect we are able to improve our processes. This

welcomed and in a trustworthy environment. This program

also strengthens our position as employers when search-

helps new employees adapt rapidly to the company´s cul-

ing for talent in the market.

ture and allows the Company to be aware of any sugges-

tions made by new employees.

Annual Report Enel Chile 2018Educational
action

Training

participated in at least one training activity during the year.

The total number of training hours reached 18,649.

Technical training is our focus due to the importance of

updating technical knowledge and acquiring new manage-

ment tools. It represented 46% of total training hours.

In terms of developing new abilities, several programs

were implemented during 2018 to support the Company´s

The Company's training program for 2018 was based on

digital transformation, such as training employees in the

two main pillars: The first was to achieve a balance between

use of Agile to disseminate the use of the new framework

training activities focused on developing competences and

throughout the organization. Regarding Enel´s commitment

those focused on technical knowledge to improve job per-

to diversity, training courses on inclusion were offered and

formance. The second was to define the training program

represented 24% of total ability development programs.

based on a mechanism that allows, the employee and the

manager, together, to detect the employee´s technical and

The training activities for employees included e-learning

behavioral gaps that need to be closed to improve individ-

courses about the Company’s Criminal Risk Prevention

ual job productivity, and also to have access to potential

Model.

future development opportunities. The mechanism is enti-

tled Professional Development Itinerary (IDP in its Spanish

Finally, as announced to all levels and categories of per-

acronym) and has a two-year implementation period.

sonnel within the Company, risk prevention, health and the

general safety of every individual is particularly relevant

In general terms, Enel Chile's training activities during 2018

and has the Company’s permanent attention.

reached 90% coverage, which means that 405 employees

People and Organization52

Annual Report Enel Chile 201809

Stock Market
Transactions

Letter from the Chairman Quarterly transactions of Enel Chile shares in Chile during the year, on the Santiago Stock Exchange, the Electronic Stock

Exchange and the Valparaíso Stoc k Exchange, as well as in the United States of America on the New York Stock Exchange

(NYSE) are detailed below.

Santiago Stock Exchange

During 2018, a total 12,557 million shares were traded on the Santiago Stock Exchange equivalent to Ch$ 867,342 million.

The closing price of the stock at year end December 2018 was Ch$ 66.97.

Units traded

Amount (Ch$)

Average price (Ch$)

1,023,628,419

669,599,795

1,101,274,869

2,794,503,083

982,457,260

948,374,974

1,842,309,584

3,773,141,818

882,382,237

982,435,243

924,907,429

2,789,724,909

1,241,977,361

1,148,464,088

808,778,893

3,199,220,342

12,556,590,152

2,017,485,622

1,768,333,500

2,298,723,478

2,784,128,550

8,868,671,150

No transactions

1,998,658,925

1,926,875,561

1,706,851,142

5,632,385,628

76,153,337,020

49,888,296,687

84,355,089,244

210,396,722,951

75,403,345,096

68,170,637,794

123,704,111,285

267,278,094,175

59,325,245,029

65,037,551,129

61,057,763,280

185,420,559,438

77,944,836,075

72,803,438,941

53,498,769,112

204,247,044,128

867,342,420,692

134,273,018,389

130,511,829,158

168,145,280,227

200,182,874,098

633,113,001,872

157,879,907,720

141,425,350,170

109,800,337,389

409,105,595,279

74.39

74.51

76.61

75.29

76.75

71.88

67.15

70.84

67.23

66.20

66.02

66.47

62.76

63.39

66.15

63.84

66.55

73.80

73.15

71.90

79.92

73.04

64.28

Month

2018

January

February

March

1st Quarter

April

May

June

2nd Quarter

July

August

September

3rd Quarter

October

November

December

4th Quarter

Total 2018

2017

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Total 2017

2016

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Total 2016

Annual Report Enel Chile 2018
Chilean Electronic
Exchange

During the year a total 1,256 million shares were traded on the Electronic Stock Exchange, amounting to Ch$ 86,114 mil-

lion. The closing price of the stock at year end was Ch$ 66.5.

Month

2018

January

February

March

1st Quarter

April

May

June

2nd Quarter

July

August

September

3rd Quarter

October

November

December

4th Quarter

Total 2018

2017

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Total 2017

2016

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Total 2016

Units traded

Amount (Ch$)

Average price (Ch$)

32,249,753

115,176,938

55,374,186

202,800,877

91,870,852

84,249,530

172,425,464

348,545,846

87,262,783

168,378,545

130,843,131

386,484,459

91,732,921

158,552,265

67,941,414

318,226,600

1,256,057,782

215,330,287

141,598,208

131,726,440

186,156,335

674,811,270

No transactions

194,419,919

244,564,668

196,586,979

635,571,566

2,447,223,242

8,555,452,190

4,281,546,857

15,284,222,289

7,089,361,795

6,169,449,266

11,656,485,041

24,915,296,102

5,838,073,045

11,096,768,974

8,622,778,715

25,557,620,734

5,806,438,117

10,064,923,101

4,485,798,286

20,357,159,504

86,114,298,629

14,497,362,796

10,496,584,882

9,494,229,275

13,656,791,178

48,144,968,131

15,318,223,758

18,185,923,824

12,673,446,594

46,177,594,176

75.88

74.59

77.48

68.56

77.11

73.28

67.56

71.48

66.90

66.14

65.99

66.13

64.09

62.90

66.02

63.97

67.33

74.13

72.08

73.36

80.25

74.00

64.96

Stock Markets Transactions
Valparaiso Stock Exchange

During 2018, a total 1.3 million shares were traded on the Valparaiso Stock Exchange, amounting to Ch$ 106 million. The

closing price of the stock at year end was Ch$ 66.2.

Month

2018

January

February

March

1st Quarter

April

May

June

2nd Quarter

July

August

September

3rd Quarter

October (*)

November (*)

December (*)

4th Quarter (*)

Total 2018

2017

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Total 2017

2016

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Total 2016

Units traded

Amount (Ch$)

Average price (Ch$)

8,060

1,100,639

1,108,699

2,077

78,957

76,000

230,957

1,341,733

776

46,219

46,995

No transactions

14,000

120,460

134,460

No transactions

604,500

90,252,398

90,856,898

No transactions

149,544

No transactions

149,544

5,009,822

5,180,160

5,031,200

15,221,182

No transactions

106,227,624

51,038

No transactions

3,340,958

3,391,996

1,102,500

8,530,418

No transactions

9,632,918

75.00

82.00

81.95

72.00

63.45

68.16

66.20

65.90

65.77

72.29

79.00

70.53

(*) On October 5, 2018 the CMF revoked the Valparaiso Stock Exchange´s trading license and therefore from that date on there are no
transactions.

Annual Report Enel Chile 2018

New York Stock Exchange
(NYSE)

Enel Chile shares began trading on the New York Stock Exchange (NYSE) on April 27, 2016. One ADS (American Depositary

Share) of Enel Chile represents 50 shares and the ticker is ENIC. Citibank N.A. acts as a depositary bank and Banco

Santander Chile as the custodian in Chile. During 2018, 117 million ADSs were traded in the United States amounting to

US$ 626 million. The ADS closing price at year end was US$ 4.93.

Month

2018

January

February

March

1st Quarter

April

May

June

2nd Quarter

July

August

September

3rd Quarter

October

November

December

4th Quarter

Total 2018

2017

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Total 2017

2016

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Total 2016

Units traded

Amount (Ch$)

Average price (Ch$)

6,163,471

10,434,316

8,762,591

25,360,378

9,844,306

9,984,325

13,863,262

33,691,893

7,043,516

9,620,403

8,224,341

24,888,260

13,220,970

14,265,499

6,046,326

33,532,795

117,473,326

17,848,377

21,754,110

14,780,786

18,089,148

72,472,421

No transactions

29,710,261

35,620,749

18,802,549

84,133,559

37,847,091

64,154,257

54,828,706

156,830,054

62,502,046

57,489,492

71,681,124

191,672,661

36,008,163

47,725,112

39,685,847

123,419,121

59,783,795

65,100,294

29,026,266

153,910,355

625,832,191

89,764,079

120,477,427

84,238,374

101,069,596

395,549,476

170,930,979

197,716,330

90,538,625

459,185,933

6.15

6.16

6.25

6.19

6.36

5.78

5.21

5.78

5.11

4.97

4.82

4.97

4.61

4.62

4.80

4.67

5.03

5.54

5.70

5.59

5.90

5.45

4.79

Stock Markets Transactions
58

Annual Report Enel Chile 2018Market
information

The level of risk appetite this year was lower than 2017 and

investors fled from emerging markets. In general, uncer-

tainly increased globally due to the possibility that central

banks would reduce liquidity and that the United States

would increase the interest rate. Market volatility in 2018

was significant as a consequence of the economic conflict

between China and the United States, which resulted from

imposing reciprocal trade tariffs on imports. The global re-

percussions of this conflict have been difficult for emerging

markets to overcome.

Santiago Stock
Exchange

The following table shows the changes in the price of the

share of Enel Chile and the Selective Stock Price Index

(IPSA) on the local stock market over the past two years:

Variation

ENELCHILE

IPSA

2017

17.4%

34.0%

2018

-7.7%

-8.3%

Accumulated
2017 - 2018

8.0%

23.7%

New York Stock
Exchange (NYSE)

In Chile, the Selective Stock Price Index (IPSA in its Spanish

The following table shows the behavior of Enel Chile’s

acronym) changed its name and it´s methodology. In order

ADRs listed on the NYSE (ENIC), compared to the Dow

to align the index to international standards, the Santiago

Jones Industrial index and the Dow Jones Utilities index

Stock Exchange signed an alliance with S&P Dow Jones.

over the past two years:

Variation

ENIC

Down Jones Industrial

Down Jones Utilities

2017

24.8%

25.1%

9.7%

2018

-13.9%

-6.0%

-1.4%

Accumulated
2017 - 2018

8.8%

17.6%

7.5%

As of September 24, 2018, S&P Dow Jones performs the

calculations of the relevant Chilean stock market indexes.

The IPSA changed its name to SPCLXIPSA as of the same

date and it is comprised of the 30 shares with the highest

trade volume in Chile. This change in methodology did not

affect its score, so that, it is comparable to the score of oth-

er periods, both before and after the change in methodolo-

gy. The index SPCLXIPSA closed in 2018 at 104.43 points,

dropping 8.3% when compared to the previous year.

During 2017, the price of Enel Chile stock dropped 7.7%, in

line with the performance of the local stock market.

The accumulated Enel Chile stock price increase for 2017

and 2018 (January 2, 2017 to December 31, 2018) was

8.0%. The IPSA, measured with the same methodology,

increased 23.7% during the same period. The price of the

ADR´s of Enel Chile fell 13.9% on the New York Stock Ex-

change during 2018 and the accumulated increase for 2017

and 2018 was 8.8%.

Stock Markets Transactions

Annual Report Enel Chile 201810

Dividends

Letter from the Chairman Dividend Policy 2019

General aspects

Dividend policy

In accordance to General Norm 283, Numeral 5, the Com-

The Board of Directors intends to distribute an interim divi-

pany’s 2019 and 2018 dividends policies are transcribed

dend for fiscal year 2018 of up to 15% of net income as of

below.

September 30, 2019, as recorded in the consolidated finan-

cial statements of Enel Chile S.A. at that date, to be paid in

The Board of Directors of the Company, in the session held

January 2020.

on February 28, 2019, approved the following Dividend

Policy and the corresponding procedure for the dividend

The Board of Directors intends to propose to the Ordinary

payments of Enel Chile S.A. for 2019.

Shareholders’ Meeting, to be held during the first four

months of 2019, to distribute a final dividend equivalent to

65% of net income for fiscal year 2019. The final dividend

will be defined by the Ordinary Shareholders Meeting to be

held during the first four months of 2020.

Compliance with the aforementioned dividend plan is sub-

ject to the actual net profit earned by the Company during

the year, and to the results of the Company’s periodic in-

come projections or the existence of certain conditions, as

applicable.

Annual Report Enel Chile 2018Dividend payment
procedure

It should be emphasized that the payment method cho-

sen by each shareholder will be used by the centralized

securities’ depository, DCV Registros S.A., for all dividend

payments unless the shareholder communicates in writing

The payment of dividends, whether interim or final and to

the intention to change it and record a new option.

avoid payment mistakes, Enel Chile offers the following

payment methods:

1. Deposit in a bank checking account, whose ac-

count-holder is the shareholder.

Shareholders who have not registered a payment method

will be paid by method No 4 indicated above.

If checks or cashier’s checks are returned by the post of-

fice to DCV Registros S.A., they will remain in custody until

2. Deposit in a bank savings account, whose ac-

collected or requested by the shareholder.

count-holder is the shareholder.

In the case of deposits in bank checking accounts, Enel

3. Mailing of a check or cashier’s check via certified mail

Chile S.A. or DCV Registros S.A. may request, for securi-

to the address of the shareholder’s residence record-

ty reasons that they be verified by the respective bank. If

ed in Enel Chile’s Shareholder Register.

there is an objection to the account indicated by a share-

holder, whether in the prior verification process or for any

The collection of a check or cashier’s check from the

other reason, the dividend will be paid according to method

offices of DCV Registros S.A., as the registrar of Enel

No 4 indicated above.

Chile’s shares, or from the bank and branches defined

for this purpose and informed in the dividend payment

Moreover, the company has adopted and will continue to

notice published.

adopt all the necessary security measures required by the

dividend payment process to safeguard the interests of the

For this purpose, bank checking, or savings accounts may

shareholders and Enel Chile S.A.

be located anywhere in the country.

DividendsDividend Policy 2018

The Board of Directors’ intends is to distribute an interim

payment mistakes, Enel Chile offers the following payment

dividend for the fiscal year 2018, of up to 15% of net in-

methods: 1. Deposit in a bank checking account, whose

come as of September 30, 2018, as shown in the financial

account-holder is the shareholder; 2. Deposit in a bank

statements of Enel Chile S.A. at that date, and payable in

savings account, whose account-holder is the shareholder;

January 2019.

3. Mailing of a check or cashier’s check via certified mail

to the address of the shareholder’s residence recorded in

The Board of Directors intends to propose to the Ordinary

Enel Chile’s shareholder register; and 4. The collection of a

Shareholders’ Meeting. to be held during the first four

check or cashier’s check from the offices of DCV Registros

months of 2019, to distribute a final dividend equivalent to

S.A., as the registrar of Enel Chile’s shares, or from the

60% of the fiscal year 2018 net income. The final dividend

bank and branches defined for this purpose and informed

will be determined by the Ordinary Shareholders’ Meeting

in the dividend payment notice published.

to be held during the first four months of 2019.

Compliance with the aforementioned dividend plan is sub-

be located anywhere in the country.

ject to the actual net profit earned by the Company during

the year, and to the results of the Company’s periodic in-

It should be emphasized that the payment method chosen

come projections or the existence of certain conditions, as

by each shareholder will be used by the centralized depos-

For this purpose, bank checking or savings accounts may

applicable.

itory of securities, DCV Registros S.A. for all dividend pay-

ments unless the shareholder communicates in writing the

Enel Chile S.A. dividend payment procedure: The pay-

intention to change it and record a new option.

ment of dividends, whether interim or final and to avoid

Annual Report Enel Chile 2018Shareholders who have not registered a payment method

will be paid by method No 4 indicated above.

If checks or cashier’s checks are returned by the post of-

fice to DCV Registros S.A., they will remain in its custody

until collected or requested by the shareholder.

Distributable net
income for fiscal
year 2018

The distributable net income for fiscal year 2018 is shown

below:

In the case of deposits in bank checking accounts. Enel

Chile S.A. or DCV Registros S.A. may request, for security

reasons, that they be verified by the respective bank. If

there is an objection to the account indicated by a share-

holder, whether in the prior verification process or for any

Net Income *

other reason, the dividend will be paid according to method

Distributable Net Income

No 4 indicated above.

* Attributable to the controlling shareholder

Moreover, the company has adopted and will continue to

adopt all the necessary security measures required by the

dividend payment process to safeguard the interests of the

shareholders and Enel Chile S.A.

Net Income *
Distributable Net Income

361,710

Dividends distributed

The following chart shows the dividends per share paid over the past few years:

Dividend No

Type of Dividend

Closing date

Payment date

Pesos per share

Fiscal year

Final

Interim

Final

Interim

Final

Interim

12-31-2015

09-30-2016

12-31-2016

09-30-2017

12-31-2017

09-30-2018

05-24-2016

01-27-2017

05-26-2017

01-26-2018

05-18-2018

01-25-2019

2.09338

0.75884

2.47546

0.75642

2.24134

0.45236

2015

2016

2017

2018

Dividends66

Annual Report Enel Chile 201811

Investment and
financing policy

Letter from the Chairman The Ordinary Shareholders' Meeting held on April 25, 2018, approved the Investment and Financing Policy described

below.

Investment Policy 2018

Areas of investment

Enel Chile will invest, according to its bylaws, in the

following: to invest in or to create subsidiaries and af-

filiate companies whose activity is aligned, related or

linked to energy in any form or type, to the supply of

public utilities, or whose main input is energy;

II.

Investments related to the acquisition, exploitation,

construction, lease, administration, trading and dis-

posal of any class of fixed assets, whether directly or

through subsidiaries;

III. Other investments in all kinds of financial assets, fi-

nancial papers or securities.

Maximum
investment limits

Participation in
the control of
investment areas

Pursuant to Enel Chile S.A. corporate purpose, the follow-

ing procedure will be applied, when possible, to control the

investment areas:

The appointment of the number of directors to at least

represent the ownership share of Enel Chile S.A.’s

stake in subsidiaries and affiliated companies will be

proposed at the Ordinary Shareholders’ Meetings of

each respective subsidiary and affiliate company. The

directors proposed will be chosen preferably from

among directors or executives of Enel Chile or its sub-

sidiaries.

ii.

The investment, financial and commercial policies, as

well as the accounting criteria and systems, will be

proposed to the subsidiaries and affiliate companies.

The maximum investment limit for each investment area

is the following:

iii. The management of the subsidiaries and related com-

Investments in the subsidiaries that operate in the elec-

tricity sector, those required for the fulfillment of the

iv. The level of debt will be a permanently controlled.

panies will be supervised.

respective corporate purpose of these subsidiaries,

limited to a maximum equivalent to 50% of total equi-

ty according to the consolidated balance sheet of Enel

Chile as of December 31, 2017;

II.

Investments in other subsidiaries, insofar at least

50.1% of total Consolidated Assets of Enel Chile are

electricity sector assets.

Annual Report Enel Chile 2018Financing policy 2018

Maximum level of debt

Enel Chile’s maximum level of debt is determined by the ra-

tio Total Financial Debt (calculated as other current financial

liabilities plus other noncurrent financial liabilities) to Equity

equal to or lower than 2.2 times calculated using the fig-

ures in the consolidated balance sheet of Enel Chile as of

December 31, 2017;

Management powers to
agree with lenders on
granting guarantees

The Extraordinary Shareholders' Meeting is required to ap-

prove granting hard assets or personal guarantees to se-

cure third party obligations when referring to the essential

assets identified below;

Management powers
to agree with lenders
restrictions related to
dividend distributions

Dividend restrictions may only be agreed with creditors if

such restrictions were previously approved by the Share-

holders’ Meeting (ordinary or extraordinary);

Essential Assets for
company operations

The shares that enable maintaining control of Enel Gener-

ación Chile and Enel Distribución Chile are essential assets

to the operations of Enel Chile. The Company may either

own the majority shareholding of these companies or con-

trol them through a shareholders' agreement.

Investment and financing policy

Annual Report Enel Chile 201812

History of the
Company

Letter from the Chairman History
of the
Company

Enel Chile S.A. was created as part of the corporate reor-

ganization process of Enersis S.A that began in April 2015.

Enersis S.A. controlled the generation, transmission and

distribution business in Chile and four other countries in

the region (Argentina, Brazil, Colombia, and Peru). The Ex-

traordinary Shareholders’ Meeting of Enersis S.A. held in

December 2015 approved the first phase of the reorgani-

zation plan entitled “the Division”, which created Enersis

Chile as the only vehicle to control the Group’s generation

and distribution assets in Chile. Enersis S.A became Ener-

sis Americas S.A., the vehicle to control all assets of the

businesses in other countries in the region.

On September 28, 2016 the Shareholder’s Meeting

of Enersis Américas, Endesa Américas, and Chilectra

Américas approved the second phase of the plan called

“the Merger” in which Enersis Américas absorbed the

businesses of Endesa Américas and Chilectra Américas.

During the same meeting, shareholders agreed to change

the name of Enersis Américas S.A to Enel Américas S.A.

On October 4, 2016, the shareholders of Enersis Chile,

Endesa Chile and Chilectra agreed to change their names

to Enel Chile, Enel Generación Chile and Enel Distribución

Chile respectively.

The organizational simplification process of the Group has

concluded, and Enel Chile participates in the electricity

generation business through its subsidiary Enel Generación

Chile. This subsidiary has 111 generation units installed

throughout the National Electricity System reaching a total

aggregate installed capacity of 6,274 MW, placing it among

the most important energy companies in the country.

Endesa Chile S.A. and Chilectra S.A. went through a simi-

lar division process.

Enel Chile participates in the distribution business through

the subsidiary Enel Distribución Chile, Empresa Electrica

de Colina Ltda. and Luz Andes Ltda. Enel Distribución Chile

Annual Report Enel Chile 2018operates a concessions area of more than 2,065.4 square

In August 2017, a corporate reorganization of Enel Chile

kilometers, covering 33 districts in the Metropolitan Re-

was proposed. This plan was entitled “Proyecto Elqui” and

gion, representing 43% of total sales of distribution compa-

involved the merger of Enel Green Power Latin America S.A.

nies in the country. Adding the areas covered by Empresa

with and into Enel Chile and a Public Tender Offer (PTO) for

Electrica de Colina Ltda. and Luz Andes Ltda.the Company

100% of the shares of Enel Generación Chile. In December

reaches a total 2,105.4 square kilometers. This makes the

2017, the respective Extraordinary Shareholders’ Meeting

Company the largest electricity commercialization compa-

approved the terms of the reorganization.

ny in Chile.

Enel Chile has also grown by adding new applications to

Enel Green Power Latin America merged with and into

electricity and by developing new ways to manage elec-

Enel Chile and Enel Chile´s shareholding in Enel Generacion

tricity. The Company was the first in the country to offer its

increased to 93.55%. This operation added 1,196 MW of

customers intelligent metering technology in 2016. Also,

non-conventional renewable energy (NCRE), mainly wind

The Elqui project became effective on April 2, 2018 when

along with the Municipality of Santiago, the Company has

and solar technology.

provided the first electric bus to operate in Santiago’s ma-

jor avenues and completely free of charge to passengers.

In September 2018, Enel Chile announced the creation of

Enel Chile seeks to promote the efficient use of the energy

a new subsidiary named Enel X Chile SpA, to develop, im-

it supplies through its subsidiary Enel Distribución Chile to

plement and sell products and services other than an elec-

almost 2 million Chileans and also seeks to collaborate with

tricity distribution concession and ancillary services, either

the environment.

regulated or not, but related to energy that involve innova-

tion, cutting edge technology, and future trends.

As part of the plan to divest non-strategic assets, in June

2016, Enel Chile sold its 20% share in GNL Quintero S.A.

Enel Chile is part of the Enel Group, a global energy compa-

to Enagás Chile S.p.A for US$ 200 million and in February

ny and one of the main integrated operators in the electric-

2017 sold its shareholding in Electrogas S.A. to Aerio Chile

ity and natural gas sectors worldwide. It is present in more

S.p.A. for US$ 180 million.

than 35 countries and in five continents. It supplies energy

to nearly 73 million people and has net installed capacity of

more than 89 GW.

History of the Company

Annual Report Enel Chile 201813

Investments
and financial
activities

Letter from the Chairman Relevant projects of the
Company’s Investment
Plan

Enel Chile coordinates the global financing strategy of the

Group´s companies, including loans among such companies,

in addition to the terms and conditions of financings, to op-

timize the Group´s debt management. The subsidiaries gen-

erally develop their capital expenditure plans independently,

financing them with internally generated funds or direct fi-

nancing. One of the objectives is to focus on investments

that will provide long-term social and economic benefits,

such as, the environmental and sustainability improvement

projects of Bocamina II. Other examples are projects that

adjust medium and low voltage networks to connect new

customers and also real estate projects.

The funds required to finance these investments have been

analyzed and included in the Company’s budget, but no par-

ticular financing structure has been committed and the in-

vestments will depend on the market conditions at the time

the cash flows are needed.

Generation

The main investments developed in Chile during 2018

focused on the construction of the Los Cóndores pass

through hydroelectric power plant (150 MW) that began

construction in 2014 and also the investments related to

finishing the optimization projects of Bocamina II power

plant (350 MW). The current priorities include the devel-

opment of environmentally and socially responsible hydro-

electric and non-conventional renewable energy projects

to guarantee adequate levels of electricity supply.

Relevant Investments
in 2018, 2017 and 2016

The capital investments carried out over the last three

The investment policy of Enel Chile S.A. is flexible enough

years were mainly related to:

to adapt to changing circumstances, prioritizing each project

based on profitability and strategic alignment. The Compa-

The 350 MW Bocamina II power plant optimization

ny expects to disburse Ch$ 1,355 billion, on a consolidated

project

basis from 2019 to 2021 to finance investment projects cur-

rently under development, future projects, maintenance of

The 150 MW Los Cóndores project

existing power plants and distribution networks.

The following table shows the expected capital expenditure

for the 2019– 2021 period and the amount incurred by our

The capital investments just mentioned, per project, were

subsidiaries in 2018, 2017 and 2016.

financed as follows:

3. Maintenance of existing installed capacity

Investment (1) (in billions of Ch$)

Chile
Total

2019-2021
1,355
1,355

2018 (1)
301
301

2017 (1)
266
266

2016(1)
157
157

> Optimization of Bocamina II: cash from the Compa-

ny´s operations.

Los Cóndores: cash from the Company´s operations

(1) The Capex figures represent actual disbursements each year,
except for future projections.

Annual Report Enel Chile 2018Projects currently
underway

Chacabuco, Panamericana, Nueva Lampa, Chena, La De-

hesa, Pudahuel, Altamirano and Macul high voltage (HV)

substations. In medium voltage (MV) the following new

12 kV lines of Enel Distribución began operations: El Roble

feeder to the Recoleta substation, the Mall Independen-

The most important projects currently in construction are:

cia and Bellavista feeders to the San Cristobal substation,

> Optimization of Bocamina II Power Plant: Environ-

the Bellavista feeder to the San Cristobal substation. The

mental improvements (coal field roofing, biomass fil-

lines in the downtown Moneda area (Alameda Tunnel Proj-

ters, among others) and sustainability initiatives (relo-

ect) were also reinforced.

Dublé Almeyda feeder to the Santa Elena substation and

cation programs, agreements with fishermen, shared

value funds, among others).

Regarding service quality, Ch$ 15 billion were invested

mainly in reinforcing certain feeders, those determined by

Los Cóndores project: 150 MW hydroelectric power

our Medium and Low Voltage Quality Plan, which included

plant located in the Maule region. Its construction be-

the automation of the MV network by adding 220 new re-

gan in 2014.

mote-control devices to the medium voltage network and

performing the necessary network adjustments to, initial-

> NCRE Projects: beginning the construction of three

ly, install 100 new devices. This allowed increasing from

new plants in 2019, one solar, one wind, and one geo-

1,500 to 1,720 the remote-controlled devices operated

thermal plant.

from the Network Operations Center.

Distribution

During 2018, Enel Distribución Chile and its subsidiaries

(Colina and Luz Andes) invested Ch$ 96 billion in projects

primarily related to satisfying natural demand growth, ser-

vice quality. and safety and information systems. Further-

more, during 2017, a total Ch$ 91 billion were invested, Ch$

32 billion in maintenance and Ch$ 59 billion to satisfy natu-

ral growth in demand.

In 2018 a total Ch$ 21 billion were invested in medium

voltage and low voltage networks allowing to connect new

customers, both residential and large customers and con-

nect real estate projects.

A total Ch$ 17 billion were invested on increasing Enel Dis-

tribución Chile’s network capacity. Worth highlighting, the

Additionally, a total Ch$ 4 billion were invested in relocating

public network infrastructure, of which the most relevant

were the Independencia and Matta-Quilicura corridors.

To comply with regulation, Ch$ 4 billion were invested in

legal procedures to normalize lines and substations.

Investment in anti-theft projects to shield the network

amounted to Ch$ 3 billion, including installing Ananda

boxes, turtle anti-theft devices, reinforcing lines and other

technical measures to more than 16,500 customers.

Nearly Ch$ 3 billion were used to finance corrective main-

tenance of transmission lines, and substations. A series of

maintenance works also focused on high risk facilities.

Finally, one of the greatest achievements of the Company

in 2018 was the installation of 190,846 smart meters in

Santiago representing a Ch$ 12 billion investment, reaching

a total 291,731 smart meters in operation in the 32 districts

investments in the Cerro Navia, Santa Rosa Sur, San José,

of Santiago.

Investment and Financing PolicyFinancial
condition

Liquidity

Hedging Policy

Exchange rate

The exchange rate hedging policy of the Enel Chile Group

is based on cash flows and seeks to maintain a balance

between flows indexed to foreign currency (US$) or local

As of year-end 2018, the subsidiary Enel Generación Chile

currencies, and the levels of assets and liabilities denomi-

relied on committed credit lines available for US$ 313 million,

nated in such currency. The goal is to minimize cash flow

committed credit lines for related companies available for

exposure to risk related to exchange rate variations.

US$ 400 million and also undisbursed commercial credit

lines for a maximum US$200 million. These were regis-

tered in the Securities Register of the Superintendence of

Securities and Insurance (SVS in its Spanish acronym) in

2009 and expire in 2019.

Indebtedness

Interest Rate

The Enel Chile Group interest rate hedging policy seeks to

maintain a balanced debt structure to minimize financial ex-

penses and reduce income statement volatility. Hedging

instruments are purchased based on market conditions,

given the Company’s projections and debt structure objec-

The consolidated financial debt of Enel Chile reached US$

tives.

3,634 million with a 7-year average life, mainly comprised

of the following:

At year-end 2018, consolidated fixed debt to total financial

debt was 71%.

•

US$ 308 million in a bridge loan to finance the Elqui

Project

•

US$ 1,000 million in a Yankee Bond that expires on

June 12, 2018

Risk Rating

•

US$ 1,074 million EGP Chile loan consolidated by the

The main events related to risk rating in 2018 are summa-

Enel Chile Group since April 2018

rized below:

•

International and local bonds of Enel Generación Chile

Net consolidated debt was US$ 3,280 million at year-end

the first time in 2017. The Company was rated “AA” on

2018 and the leverage ratio was 2.4 times.

the local scale with a stable outlook and was confirmed

Feller Rate maintained its rating of Enel Chile granted for

on July 14.

Fitch Rating confirmed its “AA” local credit rating of Enel

Chile S.A. on February 6, 2019 and improved the outlook

to positive.

On May 30, 2018, Standard & Poor’s maintained Enel Chile

S.A. a “BBB+” international credit rating with a stable out-

look. This rating is an “investment grade” rating.

Annual Report Enel Chile 2018Moody´s began performing an international rating of Enel

Chile S.A. on May 30, 2018. This first rating was “Baa2”

with a stable outlook.

Trademark

The Company’s ratings are based on its diversified asset

portfolio, strong credit parameters, adequate debt struc-

ture and high liquidity.

International rating

The Company has registered the trademark “Enersis Chile”

for services, products, industrial and commercial facilities.

Enel SpA has allowed Enel Chile S.A. to use the "Enel" trade-

mark free of charge and allows using it in its legal name,

logo and in other ways.

Enel Chile

Corporate

S&P

Moody’s

The trademark "Enel Chile" is registered legally.

BBB+ / Stable

Baa2/stable

Local rating

Enel Chile

Feller Rate

Fitch Ratings

Stocks

Bonds

1° class. Level 2

1° class. Level 1

AA / Stable

AA / Positive

Insurance

Suppliers,
customers,
and relevant
competitors

Enel Chile owns equipment and substations located in the

Metropolitan Region. These assets are covered by a global

insurance program centralized by its parent company, Enel.

The insurance covers physical damages, terrorism, busi-

Enel Chile S.A. is a Holding Company that operates primar-

ily in the electricity generation and distribution sectors in

Chile, therefore the suppliers, customers, and competitors

are those relevant to the Company's main subsidiaries that

ness interruption and legal liability. The insurance policies'

operate in the electricity sector.

renewal process was carried out through an international

bid, where the leading insurance companies worldwide

Consequently, the relevant suppliers, customers, and com-

were invited to participate. The contracts were renewed

petitors are the following:

on November 1, 2018 and expire October 31, 2019.

Metro, Gerdau Aza, Mall Plaza, AES Gener, Colbún Guacol-

da Energía, Engie Energía Chile, CGE Group, SAESA Group,

Chilquinta Group, GNL, Transelec, CMC Coal Marketing

Company Accenture Chile Asesorías y Servicios Limitada,

Sodexo Chile S.A.

Investment and Financing Policy80

Annual Report Enel Chile 201814

Risk factors

Letter from the Chairman Risk
management
policy

All Enel Chile Group companies are exposed to certain

risks that are managed through the application of systems

of identification, measurement, limit of concentration and

supervision.

The basic principles defined by Group in establishing its

risk management policy include the following:

Interest rate risk

Interest rate fluctuations modify the fair value of assets and li-

abilities that accrue interest at fixed rates, as well as the future

flows of assets and liabilities based on a variable interest rate.

The objective of interest rate risk management is to achieve a

debt structure balance that allows minimizing the cost of debt

and maintain low income statement volatility.

The comparative financial debt structure of the Enel Chile

Group, regarding fixed and hedged interest rate to total debt,

net of derivatives, is the following:

12-31-2018
%

71%

12-31-2017
%

92%

> Comply with rules of good corporate governance.

Fixed Interest Rate

> Comply strictly with the Group’s norms and proce-

dures.

Depending on the Group’s estimates and debt structure

Each business and corporate area defines:

objectives, hedging operations are performed by purchas-

ing derivatives that mitigate these risks.

The markets in which it can operate, based on

having the sufficient knowledge and abilities to

ensure effective risk management

II. Criteria on counterparties

III. Authorized operators

Exchange rate risk

Exchange rate risks are primarily related to the following

transactions:

Each business and corporate area establish, for each mar-

ket in which they operate, their position regarding risk, in

> Debt incurred by the Group’s companies in currencies

accordance to their strategy.

different from their respective operational cash flow

All operations of businesses and corporate areas are per-

currency.

formed within the limits approved for each case.

Payments in currencies different from their respective

operational cash flow currency, such as payments of

The businesses, corporate areas, business lines, and com-

project-related materials and corporate insurance pol-

panies establish the risk management controls necessary

icies.

to ensure that market transactions are performed accord-

> Revenues in the Group’s subsidiaries that are directly

ing to the policies, rules, and procedures of Enel Chile.

linked to currencies different than their respective op-

erational cash flow currency.

To mitigate exchange rate risk, the Enel Chile Group seeks

to maintain a balance between flows indexed in US dol-

lars or local currencies, should there be any, and levels of

assets and liabilities in such currency. The objective is to

minimize cash flow exposure to exchange rate fluctuations.

The instruments currently used to comply with this policy

are currency swaps and exchange rate forwards.

Annual Report Enel Chile 2018
Commodities risk

Liquidity risk

The Enel Chile Group is exposed to certain commodity

The Group’s liquidity is provided by sufficient committed

price fluctuations, primarily through:

long-term credit facilities and short-term financial invest-

ments to finance projected needs for a certain period of

Fuel purchases in the process of generating electricity.

time, which is calculated as a function of the overall situa-

Energy trading operations in local markets.

tion and expectations regarding debt and capital markets.

Said projected needs include net financial debt maturities,

To reduce risk in situations of extreme drought, the Group

in other words, after financial derivatives. For further detail

has designed a commercial policy, defining levels of sale

regarding characteristics and conditions of financial debt

commitments, in accordance to its power plant’s genera-

and financial derivatives, see Notes 18, 20 and Appendix 4.

tion capacity in a dry year, including risk-mitigation clauses

in some contracts with non-regulated customers. In the

As of December 31, 2018, the liquidity of the Enel Chile

case of regulated customers that are subject to long-term

Group amounted to Ch$ 245,175 million in cash and cash

tender processes, indexation clauses reduce commodity

equivalents, and Ch$ 416,862 million in unconditional com-

price exposure.

mitted long-term credit lines. As of December 31, 2017, the

liquidity of the Enel Chile Group amounted to Ch$ 419,456

Taking g the operating conditions faced by the electrici-

million in cash and cash equivalents, and Ch$ 199,271 mil-

ty generation market in Chile into consideration, such as

lion in unconditional committed long-term credit lines.

droughts and commodity price volatility in international

markets, the Company is constantly evaluating the conve-

nience of hedging to mitigate the impact of price fluctua-

Credit risk

tions on profits.

As of December 31, 2018, there were swap operations out-

standing for 432 kton of API2 to be settled in 2019, 994

kBbi of Brent oil to be settled in 2019, and 0.2 TBtu of Hen-

ry Hub gas to be settled in 2019 (figures are net position

hedged).

As of December 31, 2017, the company had outstanding

operations for 2.3 MMBtu, to be settled in January 2018.

These hedging instruments may be modified or could in-

clude other commodities depending on constantly chang-

ing operating conditions.

The Enel Chile Group conducts a detailed credit risk fol-

low-up.

Trade accounts
receivables

Credit risk associated to accounts receivables stemming

from commercial activity has historically been limited,

mainly due to short-term payment deadlines that prevent

clients from accumulating significant individual amounts.

This is applicable to our generation business as well as our

electricity distribution business.

In the generation business, supply disruption is a possi-

bility in the event of non-payment in some non-regulated

customer contracts and payment defaults also may qualify

as a cause for contract termination. For this purpose,

and although the risk is limited, credit risk and maximum

amounts exposed to payment risk are constantly measured

and monitored.

Risk FactorsOur electricity distribution company has the power to dis-

The calculated Value at Risk represents a potential loss of

connect supply due to contract breaches by our customers.

value of the portfolio described above in one quarter, with

Disconnection is applied according to current regulation,

95% confidence. To this effect, the company studied the

which facilitates the credit risk evaluation and control pro-

volatility of variables at risk that affect the value of the port-

cess, which is also limited.

folio, with respect to the Chilean peso, which includes:

Financial assets

Investments of cash surpluses are made in first class do-

> US dollar Libor Rate.

Exchange rates of currencies included in the calcula-

tions.

mestic and foreign financial institutions, within limits estab-

The calculation of Value at Risk is based on the extrapola-

lished for each entity.

tion of future market value scenarios (one quarter out) of

the variables at risk in scenarios based on real observations

Banks considered for investments have investment grade

for the same period (quarter), for five years.

qualification, considering the three major international

rating agencies (Moody’s, S&P and Fitch).

The Value at Risk for the next quarter, with 95% confi-

dence, is calculated as the percentile of the most adverse

Investments may be backed by Chilean Treasury bonds

5% of possible quarterly changes.

and securities issued by first-class banks, prioritizing the

latter as they offer better returns (always within existing

Based on the hypotheses stated above, the Value at Risk

investment policy guidelines).

for the aforementioned positions, one quarter out, is Ch$

318,820 million.

Risk measurement

This value represents the potential increase in the debt and

derivatives portfolio, and therefore is intrinsically linked,

The Enel Chile Group measures the Value at Risk of its debt

among other factors, to the value of the portfolio at the end

and financial derivatives to monitor the risk taken by the

of each quarter.

company, thus limiting income statement volatility.

The positions included in the portfolio used to calculate the

present Value at Risk include:

Financial debt.

> Debt-hedging derivatives.

Annual Report Enel Chile 2018Other risk
factors

and China were involved in an economic conflict that in-

volved protectionist measures. The uncertainly caused by

this conflict increased global financial market volatility.

The business depends heavily on hydrology; therefore

droughts, floods, and other weather conditions may

affect the Company's operations and profitability.

Economic fluctuations in Chile, as well as certain eco-

nomic interventionist measures by government au-

About 48% of installed generation capacity in 2018 was

thorities and also political and financial events or other

hydroelectric. Accordingly, extremely dry hydrological con-

crisis in any region, could affect the results of opera-

ditions could adversely affect the business, results of oper-

tions and financial condition of the company, as well as

ations and financial condition. Results have been adversely

the value of our securities.

affected when hydrological conditions in Chile have been

below their historical average.

All operations of Enel Chile are located in Chile. Accordingly,

its revenues are affected by the performance of the Chilean

Although our subsidiary Enel Generación Chile has entered

economy. If local, regional, or worldwide economic trends

into certain agreements with the Chilean government and

adversely affect the Chilean economy, the financial con-

local irrigators regarding the use of water for hydroelectric

dition and results of operations could be adversely affect-

generation purposes, during periods of low reservoir water

ed. Moreover, insufficient cash flows for our subsidiaries

levels, if drought conditions persist or worsen, increased

could result in their inability to meet debt obligations and

pressure by the Chilean government or third parties to pro-

the need to seek waivers to comply with restrictive debt

mote new restrictions on water use could arise.

covenants and increasing cost for subsequent financings.

The Chilean government has exercised in the past, and

Operating expenses increase during periods of drought,

continues to exercise, a substantial influence over many

as thermal plants are used more frequently. Therefore, the

aspects of the private sector, which may result in changes

company might have to buy electricity at higher spot prices

to economic or other policies. A project to develop a new

in order to comply with contractual supply obligations. The

tax reform in Chile in 2019 is currently being evaluated by

cost of these electricity purchases may exceed the con-

Congress. To this date, the outcome of this reform is un-

tracted electricity sales prices, thus potentially producing

certain.

losses in those contracts.

Future adverse developments in Chile or changes in pol-

Droughts directly affect the operation of our thermal plants,

icies regarding controls, regulations and taxation may af-

including natural gas, fuel oil and coal fueled facilities, in

fect the Company’s ability to implement its business plan,

the following ways:

and therefore adversely affect its results of operations and

financial condition. Inflation, devaluation, social instability

• Our thermal power plants require water for cooling, and

and other political, economic, or diplomatic developments

could also reduce profitability. In addition, Chilean financial

and securities markets are influenced by economic and

market conditions in other countries and may be affected

by events in other countries, which could adversely affect

the value of its companies. During 2018, the United States

extreme droughts may reduce the availability of water

and increase transportation costs. As a result, we have

had to purchase water for the San Isidro thermal power

plant from agricultural areas that are also experiencing

water shortages. These water purchases increase our

operating costs and may require negotiation with local

communities.

Risk Factors•

Thermal power plants that burn natural gas generate

vironmental standards is a violation to such regulation. The

emissions of nitric oxide (NO), carbon dioxide (CO2) and
carbon monoxide (CO). Power plants that operate with

diesel emit NO, sulfur dioxide (SO2), and particulate mat-
ter into the atmosphere. Coal-fired plants generate SO2
and NO emissions. Therefore, thermal plants during pe-

requirements of the emissions regulation currently in process

and the lack of certification of the original monitoring system

in place may lead to fines and penalties or legal proceedings

for damages. We are also subject to and annual green tax

based on the emissions of the previous year. Such taxes may

riods of drought generally increase the risk of producing

increase in the future and reduce thermal electricity genera-

higher level of pollutants, which also decrease our op-

tion incentives.

erating income due to the payment of so-called “green

taxes”.

Regulatory framework changes are frequently issued by reg-

ulators and administrative authorities and at times may have

A full recovery from the drought that has been affecting the

a significant adverse effect on the business, results of opera-

regions where most of our hydroelectric plants are located

tions, and financial condition of the Company.

may take an extended period of time, and new drought pe-

riods could recur in the future. A prolonged drought could

Regulatory authorities may impose fines on subsidiar-

exacerbate the risks described above and have an addition-

ies due to operational failures or any breach of regu-

al adverse effect on the business, results of operations and

lations.

financial condition of the Company.

Governmental regulations may adversely affect our

for any breach in regulations, including energy supply fail-

Our electricity businesses are subject to regulatory fines

businesses.

ures. Such fines may be imposed for a maximum of 10,000

Annual Tax Units (“UTA”, in its Spanish acronym), or Ch$

The Company and the tariffs we charge our customers,

5,800 million using the UTA as of December 31, 2018. Our

among other aspects of the business, are subject to exten-

electricity generation subsidiaries are supervised by local

sive regulation and these regulations may adversely affect our

regulatory entities and are subject to these fines in cases

profitability. For example, governmental authorities might im-

where, in the opinion of the regulatory entity, operational

pose material rationing policies during droughts or prolonged

failures affecting the regular energy supply to the system

failures of power facilities, which may adversely affect our

are the fault of the Company, including coordination diffi-

business, results or operations and financial condition. Our

culties that are considered to be the generators responsibil-

subsidiaries are also subject to environmental regulation that

ity. Regulation establishes a compensation to end custom-

requires, among other things, that future projects present en-

ers when energy supply is interrupted for a longer period of

vironmental impact studies and obtain building permits and

time than the standard time allowed due to events or fail-

operation authorizations on a local and national level. Such

ures affecting transmission facilities. For generators, the

approvals may be withheld by authorities and therefore may

compensation is calculated as a proportion of the energy

take longer than estimated.

not supplied, with a minimum value between 20,000 UTA

Governmental authorities may also delay the distribution tariff

revenue. Fines are also related to breach of regulation.

review process, or tariff adjustments may be insufficient to

pass through all costs to our customers. Similarly, electricity

The Company depends on payments from subsidiaries

(Ch$ 11,600 million) and the previous year’s energy sales

regulations issued by governmental authorities in Chile may

to meet payment obligations.

affect the ability of generating companies to collect revenues

enough to offset their operating costs.

To pay its obligations, the Company relies on cash from divi-

Environmental regulation applicable to future and existing

distributions from our subsidiaries. The ability of subsidiaries

generation capacity has become more restrictive and require

to pay dividends, interest payments, loans and other distribu-

higher capital investments. Any delay in complying with en-

tions is subject to legal constraints, such as dividend restric-

dends, loans, interest payments, capital reductions and other

Annual Report Enel Chile 2018tions, fiduciary duties and contractual limitations that may be

Market conditions at the time projects are initially approved

imposed by local authorities.

may differ significantly from those that prevail when proj-

ects are completed, which in some cases may make them

Contractual constraints. Distribution restrictions included in

commercially unfeasible. This has been the case in many

some credit agreements of our subsidiaries prevent dividend

of our former projects, which were initially planned under

payments and other distributions to shareholders if the com-

completely different market conditions with higher energy

pany is not in compliance with certain financial ratios. Gener-

prices prevailing in the market and less competition. De-

ally, our credit agreements prohibit any type of distribution if

viations from these assumptions, including timing estima-

there is an outstanding past due commitment.

tions and expenditures related to these projects, may lead

to cost over-runs and a completion time widely exceeding

Operating results of the Company's subsidiaries. The ability

our estimates, which in turn may have negative effects on

of subsidiaries to pay dividends, amortize loans, or make oth-

our business, results of operations and financial condition.

er distributions, is limited by their operating results. To the

extent that the cash requirements of any subsidiary exceeds

We are currently building the Los Cóndores project, which

its available cash, the Company will be unable to rely on re-

consists of a 150 MW pass-through hydroelectric power

sources from such subsidiary.

plant.

Any of the situations described above could negatively affect

The locations where the Company may develop new proj-

our business, results of operations and financial condition.

ects are also sometimes highly challenging in terms of geo-

graphical topography, in some cases in mountain slopes

The Company is involved in litigation proceedings

with very limited access. These factors may also lead to

significant delays and cost overruns. For example, our 41

Currently, the Company is involved in various litigation

MW Cerro Pabellon geothermal power plant was built

proceedings, which could result in unfavorable verdicts or

4,500 meters above sea level and we are currently building

fines. The Company will continue to be subject to future

a third unit that will increase its capacity in 33 MW. We

litigation proceedings, which could cause considerable ad-

have faced challenges due to the altitude, including health

verse consequences to the business.

issues and others, that can affect the timing of the con-

struction and the related investment amounts. Archeolog-

The financial condition or results of operations could be ad-

ical risks also arise due to the geography of some project

versely if positive results are not obtained in lawsuits and

locations.

proceedings against the Company. For more information

on litigation proceedings, see Note 33.3 of the Notes to the

Political events or financial or other crises in any re-

Consolidated Financial Statements.

gion worldwide can have a significant impact in Chile,

and consequently may adversely affect operations, as

Power plant projects may encounter significant op-

well as liquidity.

position that may delay their development, increase

costs, damage the reputation and potentially result in

Chile is vulnerable to external shocks, including financial

impairment of goodwill with stakeholders.

and political events, which could cause significant econom-

ic difficulties and affect growth. If Chile´s economy goes

The construction of our power plants may encounter delays

into a recession or the growth rate is lower than expected,

in obtaining permits or may face shortages and increases

electricity demand will possibly decline, and some cus-

in the price of equipment, material or labor, and may be

tomers may face difficulties in paying their electricity bill,

subject to construction delays, strikes, adverse weather

possibly increasing the Company´s uncollectible accounts.

conditions, natural disasters, civil unrest, accidents, and

Either one of these situations could adversely affect results

human error. Any of these events could have an adverse

of operations and the financial condition of the Company.

effect on our results and financial conditions.

Risk FactorsFinancial and political events in other parts of the world

tions in the future. The acquisition and integration of in-

could adversely affect our business. For example, during

dependent companies that the Company does not own is

2018, the United States and China were involved in an eco-

generally a complex, costly, and time-consuming process

nomic conflict related to protectionism. The instability in

that requires significant effort and expenses. If the com-

the Middle East or in other oil producing regions could also

pany seals an acquisition, it could result in the incurrence

lead to higher fuel prices worldwide increasing the operat-

of substantial debt and adding unknown liabilities, the po-

ing costs of our thermal power plants and adversely affect-

tential loss of key employees, amortization expenses relat-

ing our results of operations and financial condition.

ed to tangible assets, and the diversion of management’s

The federal government of the United States shut down

delay or difficulty encountered in connection with an ac-

three times in 2018. The last time, the longest one in

quisition or integration of multiple operations could have a

its history, began on December 22 and continued for 35

material adverse effect on our business, financial condition

attention from other business concerns. In addition, any

days, and affected the Securities and Exchange Commis-

and results of operations.

sion (SEC) among other federal agencies. On January

4, 2019, President Trump announced that the shutdown

The business and profitability could be adversely af-

could continue for “months or even years” as a result of

fected if water rights are denied or if water conces-

the controversy regarding the wall to be built at the border

sions are granted with limited duration.

between Mexico and the United States, which was one of

the most important commitments of his presidential cam-

The Company owns water rights granted by the Chilean

paign. A temporary shutdown or a threat to shutdown the

Water Authority (Dirección General de Aguas) for the sup-

Government of the United States affecting the operations

ply of water from rivers and lakes near production facilities.

of the SEC could have an adverse effect on the timing and

Under current law, these water rights are (i) unlimited in

costs of the transactions involved in the Company´s reor-

duration, (ii) absolute and unconditional property rights,

ganization process.

and (iii) not subject to further challenge. Chilean genera-

tion companies must pay an annual license fee for unused

Additionally, an international financial crisis and its disrup-

water rights.

tive effects on the financial industry could negatively affect

the Company’s ability to obtain new bank financing on the

New hydroelectric facilities are required to obtain water

same historical terms and conditions we have obtained to

rights, the conditions of which may impact design, timing,

this date.

or profitability of a project.

Political events or financial or other crises could also dimin-

In addition, Chilean Congress is analyzing amendments to

ish access to Chilean and international capital markets or

the Water Code since 2014 to prioritize the use of water by

increase the interest rates. Reduced liquidity could, in turn,

defining its access as a human right that must be guaran-

negatively affect capital expenditures, long-term invest-

teed by the State. The amendment establishes that water

ments and acquisitions, growth prospects and dividend

use for human consumption, domestic subsistence and

policy.

sanitation will always take precedence in granting and lim-

iting the exercise of rights of exploitation. The restrictions

We may be unable to enter into convenient acquisitions

imposed to preserve waterflows could reduce the water

or successfully integrate the businesses we acquire.

available to electricity generators.

The Company permanently reviews acquisition prospects

Any limitation on the Company’s current water rights,

that may increase its market share or add value to existing

the need for additional water rights, or the current water

businesses, although there can be no assurance that we

concessions of unlimited duration could have a material

will be able to identify and carry out convenient acquisi-

adverse effect on hydroelectric development projects and

profitability.

Annual Report Enel Chile 2018Foreign exchange risks may adversely affect results

nonregulated prices and had chosen regulated prices in the

and the U.S. dollar value of dividends payable to ADS

past, chose the lower unregulated prices. These custom-

holders.

ers are tendering their energy needs, either directly or with

other customers, because of the price advantage, when

The Chilean peso has been subject to devaluations and ap-

compared to regulated prices, because regulated prices are

preciations against the U.S. dollar and may be subject to

based on contracts tendered in the past at higher prices. A

significant fluctuations in the future. Historically, a signifi-

decrease in market prices could reduce the number of reg-

cant portion of the Company's consolidated debt has been

ulated customers and could cause customers to choose

denominated in U.S. dollars. Although a substantial portion

another electricity provider, which would reduce the com-

of our operating cash flows is linked to the U.S. dollar (es-

pany’s customer base and therefore adversely affect the

pecially those from the generation business), it has gener-

business, results of operations and financial condition.

ally been, and will continue to be, exposed to fluctuations

of the Chilean peso against the U.S. dollar because of time

The electricity business is subject to risks arising from

lags and other limitations to adjusting our electricity tariffs

natural disasters, catastrophic accidents, and acts of

to the dollar, and the potential difficulty of incurring debt in

terrorism that could adversely affect our operations,

the same currency as the operating cash flow.

earnings and cash flow.

Because of this exposure, the U.S. dollar value of cash gen-

Our primary facilities are power plants and distribution

erated by subsidiaries could decrease substantially due to

assets in Chile. They may be damaged by earthquakes,

peso devaluations against the U.S. dollar. Future volatility

floods, fires, and other catastrophic disasters caused by

in the exchange rate of the currency in which the Company

nature or by humans, such as acts of vandalism, riots, and

receives revenues or incurs expenditures may adversely

terrorism. A catastrophic event could cause disruptions

affect the business, financial condition and results of op-

in the business, significant decreases in revenue due to

erations.

lower demand or significant additional costs not covered

by business interruption insurance. There may be lags be-

Long-term energy sale contracts are subject to fluc-

tween a major accident or catastrophic event and the final

tuations in the market prices of certain commodities,

reimbursement from insurance policies, which typically

energy and other factors.

carry a deductible and are subject to per-event maximum

In the conventional generation business, the company is

amounts.

economically exposed to fluctuations in the market prices

The distribution business is also affected by severe

of certain commodities as a result of the long-term energy

weather conditions. Demand may increase significantly

sales contracts the company has entered, and the fact that

in a short period of time due to extreme temperatures.

currently 97% of expected annual generation is sold under

contracts with terms of at least five years. As the selling

The company is subject to financing risks, such as

party, the company has material obligations under long-

those associated with funding new projects and cap-

term, fixed-price electricity sales contracts. Prices in these

ital expenditures, and risks related to refinancing ma-

contracts are indexed according to different commodities,

turing debt. It is also subject to covenant compliance,

exchange rates, inflation, and the market price of electric-

all of which could adversely affect liquidity.

ity. Adverse changes to these indices would reduce the

rates charged under long-term, fixed-price electricity sales

As of December 31, 2018, our consolidated interest-bear-

contracts, which could adversely affect the business, re-

ing debt totaled Ch$ 2,525 billion.

sults of operations and financial condition.

The Company’s interest-bearing consolidated debt has the

Since 2016, in conformity with Chilean law, some cus-

following maturity profile:

tomers allowed to choose between either regulated or

Risk Factors•

Ch$ 339 billion in 2019;

The company relies on electricity transmission facili-

•

Ch$ 339 billion from 2020 to 2021;

do not provide an adequate transmission service, we

ties that it does not own or control. If these facilities

may be unable to deliver the power we sell to our final

•

Ch$ 218 billion from 2022 to 2023; and

customers.

•

Ch$ 1,629 billion thereafter.

To deliver energy, the Company depends on transmis-

sion systems that are owned and operated by unaffiliat-

Some debt agreements are subject to (1) satisfying finan-

ed companies. This dependence exposes several risks. If

cial covenants, (2) affirmative and negative covenants, (3)

transmission is disrupted, or the transmission capacity is

events of default and (4) mandatory prepayments for con-

inadequate, it may be impossible to sell and deliver elec-

tractual breaches, among other provisions. A significant

tricity. If a region’s power transmission infrastructure is

portion of the Company’s financial indebtedness is subject

inadequate, the recovery of costs of sales and profit may

to cross-default provisions, which have varying definitions,

be insufficient. If restrictive transmission price regulation is

criteria, materiality thresholds and applicability with respect

imposed, transmission companies upon whom the Com-

to subsidiaries, which may give rise to cross defaults. Be-

pany relies may not have sufficient incentives to invest in

cause of the 2018 Reorganization, in which we incurred

the expansion of their transmission infrastructure, which

debt primarily to finance the Enel Generación Chile tender

could adversely affect operations and financial results. The

offer, we also have our own financial indebtedness at the

construction of new transmission lines may take longer

holding company level, which is also subject to cross de-

than in the past, mainly because of new social and environ-

fault provisions.

mental requirements that add uncertainty to the probability

of completing these projects.

If the company or its subsidiaries breach any of these

contractual provisions, debtholders may demand immedi-

In the past, there have been blackout events due to fail-

ate repayment, and a significant portion of debt could be-

ure of transmission lines that exposed weaknesses in the

come due and payable. The Company could be unable to

transmission grid, and the need for expansion and techno-

refinance its debt or obtain such refinancing in acceptable

logical improvements to increase its reliability. Additional

terms. In the absence of refinancing, the Company may be

failures may occur in the future.

forced to dispose of assets in order to cover debt service

payments in conditions that would not favor obtaining the

Any disruption or failure in transmission facilities could

best price for such assets. Furthermore, selling its assets

interrupt the business, whichh could adversely affect the

quickly enough or at high enough prices to cover the debt

results of operations and financial condition.

could be impossible.

It may also be impossible to raise the necessary funds re-

if the company is unable to reach satisfactory collec-

quired to finish projects under development or construc-

tive bargaining agreements with unionized employees

The business could experience adverse consequences

tion. Market conditions prevailing at the time these funds

or retain key employees.

are required, or other unforeseen project costs could com-

promise the Company’s ability to finance projects and ex-

A large percentage of employees are members of unions

penditures.

and have collective bargaining agreements that must be re-

newed on a regular basis. The business, financial condition

The inability to finance new projects or capital expenditures

and results of operations could be adversely affected by a

to refinance existing debt could adversely affect results of

failure to reach agreement with any labor union represent-

operation and financial condition.

ing such employees or by an agreement with a labor union

Annual Report Enel Chile 2018that contains terms deemed unfavorable. Chilean law pro-

We cannot give assurance that the price or the liquidity

vides legal mechanisms for judicial authorities to impose a

of its shares or ADSs will not be negatively affected by

collective agreement if the parties are unable to come to

events in Latin American markets or the global economy

an agreement, which may increase costs beyond what has

in general.

been budgeted.

In addition, we employ many highly-specialized employees,

plaints based on foreign legal concepts may have un-

Lawsuits against the Company outside Chile or com-

and certain actions such as strikes, walk-outs or work stop-

favorable outcomes.

pages by these employees could adversely affect the busi-

ness, results of operations and financial condition, as well as

The Company's investments are all located outside of the

the company’s reputation.

United States. All directors and officers reside outside the

The relative illiquidity and volatility of the Chilean se-

the United States as well. If any investor were to sue a

curities markets and its dependence on economic con-

director, officer, or expert in the United States, it may be

ditions in Latin America and other parts of the world

difficult for that investor to effect service of legal process

could adversely affect the price of ordinary stock and

within the United States upon these persons, or to enforce

United States and most of their assets are located outside

ADS.

against them, judgments obtained in the United States

courts based upon the civil liability provisions of the federal

Chilean securities markets are substantially smaller and

securities laws of the United States, in United States or

less liquid than the major securities markets in the United

Chilean courts. In addition, there is doubt as to whether an

States or other developed countries. The low liquidity of

action could be brought successfully in Chile on the basis

the Chilean market may impair the ability of shareholders

of liability solely based upon the civil liability provisions of

to sell shares, or holders of ADS to sell shares of ordinary

the United States federal securities laws.

stock withdrawn from the ADS program, into the Chilean

market in the amount and at the price they wish to do

Interruption or failure of

information technology

so. Also, the liquidity and the market for shares or ADSs

or communications systems, or external attacks or

may be affected by countless factors including variations

breaches of these systems could have an adverse ef-

in exchange and interest rates, the deterioration and vola-

fect on operations and results.

tility of markets for similar securities, and any changes in

liquidity, financial condition, creditworthiness, results, and

The company depends on information technology, commu-

profitability.

nication and processing systems ("IT Systems") to operate

its business, the failure of which could adversely affect the

In addition, Chilean securities markets may be affected in

business, results of operations and financial condition.

many ways by economic and market conditions and de-

velopments in Latin American countries, other emerging

IT systems are becoming more vital worldwide, and the

markets and elsewhere in the world. Even though eco-

electricity sector is not an exception. In the generation

nomic conditions in such countries may differ significantly

business, IT systems are essential in monitoring power

from economic conditions in Chile, investors’ reactions to

plants’ operations, maintaining generation and network

developments in any of these other countries may have

performance, adequately generating invoices to custom-

an adverse effect on the market value and liquidity of se-

ers, achieving operational efficiencies and meeting service

curities for Chilean issuers. An increase in perceived risks

targets and standards. Our distribution subsidiaries could

associated to investing in South American countries and

also be affected adversely because they rely heavily on IT

elsewhere in the world could lessen capital flows to Chile

systems to monitor their grids (known in some countries as

and adversely affect the Chilean economy in general, and

smart grids, due to the higher digitalization of the market),

the interests of investors in our shares or ADSs.

Risk Factors92

Annual Report Enel Chile 2018billing processes for millions of customers and customer

service platforms. Temporary or long-lasting operational

failures in any of these IT systems, either intentional or not,

could have a material adverse effect on results of opera-

tions. Additionally, cyber-attacks can have an adverse ef-

fect on the company’s reputation and relationship with the

community. Over the past few years, global cyber-attacks

on security systems, treasury operations, and IT Systems

have intensified worldwide. We are exposed to cyber-at-

tacks aimed at damaging our assets through computer

networks, cyber-spying involving strategic information that

may be beneficial for third parties, and the cyber-theft of

proprietary and confidential information, including custom-

er information. The company is exposed to several sorts of

cyber-attacks, including denial-of-service attacks that may

negatively affect user service accessibility, as well as at-

tacks that could affect domain name systems, preventing

the use of certain useful web pages and applications.

Risk Factors94

Annual Report Enel Chile 201815

Reorganization -
Elqui Project

Letter from the Chairman Elqui project

On August 25, 2017, the Board of Directors proposed a cor-

porate reorganization (hereafter the 2018 Reorganization)

to the shareholders to consolidate the conventional and

nonconventional renewable energy businesses in Chile in

one sole company, Enel Chile, that would be the only in-

vestment vehicle of Enel in Chile. The 2018 Reorganization

involved the following transactions:

> A merger of Enel Green Power Latin America S.A.

(EGPL) with and into Enel Chile (hereafter the Merger).

EGPL is a limited liability corporation incorporated in

Chile. Before the 2018 Reorganization, EGPL was

a member of the Enel Green Power group. Enel

Green Power is a multinational company dedicated

to electricity generation with renewable sources

controlled by Enel. EGPL is a renewable energy

generation holding dedicated to electricity generation

in Chile through its wholly owned subsidiary Enel

Green Power Chile Ltda. (hereafter EGP Chile).

December 20, 2017, the Extraordinary Shareholders’

Meeting of Enel Chile approved the corporate reorganiza-

tion process (the “Reorganization”) that includes the fol-

lowing phases:

According to Chilean law, the 2018 Reorganization was a

related party transaction subject to the legal requirements

established in Title XVI of Chile´s Corporations Law. There-

fore, the following additional requirements were satisfied:

> A public tender offer in cash of shares by Enel Chile

to purchase all ordinary shares (including American

Depository Shares or ADS) of Enel Generación Chile,

except those already held by Enel Chile (hereafter

Public Tender Offer) The Public Tender Offer was

subject to the condition that the shareholders offering

their shares and ADS accept to use Ch$ 236 of the

Ch$ 590 offered for each Enel Generación share and

Ch$ 7,080 of the Ch$ 17,700 for each ADS of Enel

Generación to subscribe Enel Chile ordinary shares at

an Ch$ 82 subscription price per share (or Ch$ 2,460

per ADS of Enel Chile) (hereafter Enel Chile share/

ADS subscription condition);

> A capital

increase

(hereafter Capital

Increase),

to make enough ordinary shares available to be

delivered to those shareholders and ADS holders of

Enel Generación selling their shares and ADS and

satisfying the condition to the Public Tender Offer to

subscribe shares/ADS of Enel Chile.; and

The board member and executives that had an inter-

est in the related party transaction declared such in-

terest;

Two thirds of the outstanding shares with voting

rights approved the related party transaction in the

ESM held on December 20,2017; and

The board resolutions that established the related par-

ty transactions and the identity of the board members

that approved such transactions were disclosed in the

OSM held on December 20, 2017.

The following requirements were also satisfied:

The board of directors appointed an independent

evaluator to inform shareholders on the conditions,

effects, and potential impacts of the operation on the

Company;

Annual Report Enel Chile 2018>

The directors´ committee appointed an additional in-

dependent evaluator;

The opinions of independent evaluators were publicly

disclosed; and

Each board member publicly disclosed its opinion on

whether the related party transaction was in the best

interest of the company and disclosed any possible

interest in the related party transaction.

All phases of the 2018 Reorganization were approved by

the shareholders of Enel Chile, Enel Generacion and EGPL

in their respective extraordinary shareholders´ meetings, all

held on December 20, 2017. The Public Tender Offer took

place from February 16, 2018, to March 22, 2018; the pre-

emptive rights period related to the Capital Increase took

place from February 15, 2018 to March 16, 2018 and the

2018 Reorganization, including all its phases, concluded

and became effective on April 2, 2018.

The materialization of the 2018 Reorganization increased

our shareholding in Enel Generacion from 60.0% to 93.5%.

We continue to own 99.1% of Enel Distribucion. We cur-

rently consolidate the conventional and renewable electric-

ity generation business in Chile through Enel Generacion,

the Chilean distribution business through Enel Distribución,

and the nonconventional renewable electricity generation

business in Chile through EGP Chile. After the materializa-

tion of the 2018 Reorganization, Enel continues to be our

parent company and controlling shareholder with a 61.9%

shareholding with voting rights (excluding the shares

owned by the company itself that will be cancelled).

Annual Report Enel Chile 201816

Industry
regulation
and electricity
system
operations

Letter from the Chairman General
features

a) Regulatory
framework:

Chile’s electricity sector is regulated by the Chilean Elec-

tricity Law 20,218, contained in the Ministry of Mining DFL

1 issued in 1982. Its restated text was established by Min-

istry of Economy DFL 4, issued in 2006 (the “Electricity

Law”) and its respective regulations contained in D.S. 327

issued in 1998.

The main authority in the energy industry is the Ministry

of Energy that is the government body responsible for pro-

posing and delivering comprehensive public policies as a

coordinate effort. It exists since February 1, 2010 as an

autonomous entity after being part of the Ministry of Min-

ing for many years.

The National Energy Commission (”CNE”, in its Spanish

acronym) that regulates the electricity industry and the

Superintendence of Electricity and Fuel (Chilean “SEC”, in

its Spanish acronym) that is the supervising body, are also

relevant industry authorities. They report to the Ministry

of Energy. Other entities that report to this Ministry are:

the Chilean Nuclear Energy Commission (“CChEN”, in its

Spanish acronym), the Chilean Sustainable Energy Agency.

The CNE is the entity in charge of proposing the regulated

tariffs, approving the annual transmission expansion plans,

and elaborating the indicative plan for the construction of

new electricity generation facilities. The SEC inspects and

oversees compliance with the law, rules regulations and

technical norms applicable to electricity generation, trans-

mission and distribution, liquid fuels and gas.

Additionally, the law provides for a Panel of Experts, com-

prised of professional experts, whose main responsibility

is to acts as a court, issuing enforceable resolutions in dis-

putes related to subjects referred to by the Electricity Law

and other electricity related laws.

100

According to the Law, the operation and coordination of

the Chilean electricity system is to be carried out by a Na-

tional Electricity Coordinator. It is an independent entity

in charge of coordinating the operation of the electricity

system with the following objectives: i) maintain service

security; ii) guarantee the efficient operation of the fa-

cilities connected to the system; and iii) guarantee open

access to all transmission networks. The main activities

of this entity include the coordination of electricity market

operations, authorization of connections, supplementary

services management, implementation of information sys-

tems available to the public, and monitor competition and

payments, among others.

The Chilean electricity sector is physically divided into three

main networks, the National Electricity Network (“SEN” in

its Spanish acronym) and two smaller isolated networks;

Aysén and Magallanes. The SEN is the outcome of the

integration of the Central Interconnected System (“SIC” in

its Spanish acronym) and the Norte Grande Interconnected

System (“SING” in its Spanish acronym) that took place in

November 2017. Until then the SIC was the main grid and

extended 2,400 km from Taltal in the north to Quellón on

the island of Chiloé to the south. The SING covered the

northern part of the country, from Arica to Coloso, and ex-

tended 700 km.

The electricity industry in Chile is divided into three seg-

ments or businesses: generation, transmission, and distri-

bution. Operations of the related facilities must be inter-

connected and in coordination to supply electricity at the

minimum cost within the certain safety and quality stan-

dards required by electricity industry regulation.

Given the structural characteristics of the transmission

and distribution segments, they are considered natural

monopolies and are therefore subject to special industry

regulation, the network is open access, and tariffs are reg-

ulated.

The Chilean electricity market trades two products (energy

and capacity), and additionally several related services. The

National Electricity Coordinator performs the calculation of

market balances, determines the transfers among gener-

ation companies and calculates the hourly marginal cost,

which is the price at which energy transfers are carried out.

The CNE determines the price of generation capacity.

Annual Report Enel Chile 2018Customers are classified according to their demand as

regulated or unregulated. Regulated customers are those

whose connected capacity is below 5,000 kW. Customers

with connected capacity between 500 kW and 5,000 kW

may choose to be regulated or unregulated, subject to the

respective price regime.

Limits to integration
and concentration

In Chile, antitrust legislation along with specific regula-

a.1 Generation segment

The operations of generation companies are conditioned

by the operations plan of the System Coordinator, although

they may freely decide whether to sell their energy to ei-

ther regulated or nonregulated customers. Any surplus or

deficit between sales and production is sold to or bought

from other generators at the spot market price.

A generation company may have the following types of

customers:

tion applicable to the electricity industry define criteria to

• Nonregulated customers, are customers whose

avoid certain levels of market concentration and abusive

connected capacity is greater than 5,000 kW, main-

practices.

ly industrial and mining companies and customers

whose connected capacity ranges between 500 and

Companies are allowed to participate in the different indus-

5,000 kW and choose to be non-regulated for a min-

try segments (generation. distribution and commercializa-

imum of 4 years in either regime. These customers

tion/trading) in so far an adequate level of corporate and

may freely negotiate their electricity supply prices

accounting separation exists. The transmission sector is

with generators or distributors.

where most restrictions are imposed, mainly due to the na-

ture of the activity and the need to guarantee adequate ac-

•

Distribution companies, that supply regulated and

cess to all players. The Electricity Law defines limits to the

non-regulated customers. Distribution companies

market share that generation companies and distribution

supply their regulated customers through public ten-

companies may have of the National Transmission seg-

ders regulated by the CNE and supply their nonregu-

ment and prohibits National Transmission companies from

lated customers through bilateral contracts.

participating in the generation and distribution segments.

101

Industry Regulation and Electricity Industry Operations• Other Generation companies. The relationship

al Transmission, Development Pole Transmission, Zonal

between generation companies may be formalized

Transmission, Dedicated Transmission and International

through bilateral contracts or on the Spot or short-

Interconnection Systems.

term market: The latter refers to the transactions of

energy and capacity between generation companies

Transmission installations are open access to any user that

resulting from the efficient operation of the market

requests it, without discrimination. The compensation for

by the National Electricity Coordinator. The surplus

existing transmission installations, either National or Zonal,

(deficit) of production after supplying customer com-

is determined by a tariff setting process performed every

mitments are transferred by selling (buying) to (from)

four years. This process determines the Annual Transmis-

other generators connected to the system. Electricity

sion Value comprised of efficient operations and manage-

transfers are priced at the marginal cost of the sys-

ment costs and an investment value annuity, determined

tem. Capacity transfers are carried out at the corre-

by a discount rate (minimum 7% after tax) set by the au-

sponding node price, as set every semester by the

thority every four years based on a study and the useful

authority.

life of assets.

In Chile, capacity payments to each generator depend on

The development of the National and Zonal Transmission

the calculation, based on current rules, performed annual-

systems is determined by a regulated and centralized pro-

ly by the National Electricity Coordinator that determines

cess carried out by the National Electricity Coordinator,

the firm capacity of each power plant. Firm capacity mainly

which presents an expansion plan every year that must be

depends on availability of the facilities and of the source of

approved by the CNE.

generation.

Non-conventional renewable
energies

Law 20,257 enacted in April 2008 creates incentives to

use Non-Conventional Renewable Energies (NCRE). This

rule determined that by 2014, at least 5% of energy com-

mercialized by generators must come from renewable

sources and must progressively increase 0.5% every year

from 2015 until 2024 to reach 10%. This law was modified

in 2013 by Law 20,698, entitled the 20/25 law, establish-

ing that by 2025, 20% of the electricity matrix must be

covered by NCRE sources. For contracts in force up to July

2013, the withdrawals established by the previous law are

to be respected.

a.2 Transmission segment

Transmission systems are comprised of lines and substa-

tions that form an electric system that are not distribution

installations. They are divided into five segments: Nation-

The expansion of both systems is granted through an open

tender process that discriminates new installations from

enlargement of existing installations. The tenders carried

out for new installations grant the winner ownership of

the installation to be built. The expansion of existing in-

stallations, on the other hand, belongs to the owner of the

original installation, who must tender the construction of

the required expansion.

The remuneration of the new facilities is determined by the

outcome of the bid and represents the income for the first

20 years of operations. The remuneration of new facilities

is determined by the investment amount resulting from the

bid and the applicable operation and maintenance costs.

In both cases from year 21 on, the remuneration of such

transmission facilities is determined as existing assets.

The regulation currently in force determines that trans-

mission remuneration is the sum of tariff revenue and the

billings of a fee for the use of transmission lines. Such fee

is defined every six months by the CNE as an amount of

Ch$ per kWh.

102

Annual Report Enel Chile 2018a.3 Distribution segment

Cost (VNR in its Spanish acronym) of facilities adjusted to

demand, expected life and a 10% real annual discount rate.

For regulatory purposes, the distribution segment is de-

fined as all electricity supplied to end customers at a volt-

age of up to 23kV.

Distribution companies operate under the framework

of a public service concession. They have the obligation

to serve all customers and provide electricity at regulat-

ed prices to regulated customers (customers with under

5,000 kW connected capacity, unless falling within the 500

and 5,000 kW category and chose the nonregulated tar-

iff). Nonregulated customers may negotiate their electrici-

ty supply with any generation or distribution company but

must pay a regulated toll for using the distribution network.

Regarding electricity supply to regulated customers, the

law determines that distribution companies must perma-

nently have electricity available to supply its customers and

it must obtain such electricity through open, non-discrim-

inatory and transparent public tenders. These tenders are

in advance to award 20-year term contracts. If demand

changes unexpectedly, the authority has the power to call

The VAD is then determined as a weighted average, one-

third of the value estimated by the study of the companies

and two-thirds by the CNE. The CNE then determines the

basic tariffs and verifies that the aggregate return of the

industry is within the 10% plus/minus 4% range.

Additionally, every four years, when the VAD is being cal-

culated, the Antitrust Court reviews the services consid-

ered to be Related Services and subject to price regulation.

The Chilean distribution tariff model is a consolidated mod-

el that has carried out nine price-settings processes since

the enactment of the Electricity Law in 1982.

b) Regulatory
issues 2018

CNE 2018 Regulatory Plan

a short-term tender and also a regulated procedure to re-

Pursuant to Exempt Resolution 20 dated January 12, 2018,

munerate noncontracted electricity sales.

and according to Article 72-19 of the Electricity Law, the CNE

published its 2018 Annual technical regulation development

The processes for setting distribution tariffs are carried

plan. The document establishes the guidelines and priorities

out every four years based on a cost analysis to determine

of the CNE´s work relative to regulations during 2018 and the

the Distribution Value Added (VAD in its Spanish acronym).

definition of the procedures applicable to 2017 rules that are

The VAD is based on an efficient model company scheme

pending.

and the typical area concept.

To determine the VAD, the CNE classifies the companies

with similar distribution costs into groups named “typical

areas”. For each typical area, the CNE and the distribution

companies hire independent consultants to carry out stud-

ies to determine the costs of an efficient model company,

considering fixed costs, average energy and capacity loss-

es, and standard investment, maintenance, and operations

costs related to electricity distribution. The annual invest-

ment costs are calculated based on the Net Replacement

CNE 2019 Regulatory Plan

Pursuant to Exempt Resolution 790 dated December 10,

2018, and according to Article 72-19 of the Electricity Law,

the CNE published its 2019 Annual technical regulation de-

velopment plan. The document establishes the guidelines

and priorities of the CNE´s work on regulations during 2019

and the definition of the procedures applicable to 2018 rules

that are pending.

103

Industry Regulation and Electricity Industry OperationsRules published in 2018

•

Expert Panel Rules and Regulations. On January

5, 2018, the Ministry of Energy published the new

Expert Panel Rules and Regulations in the Official Ga-

zette. The purpose of the document is to establish the

Expert Panel´s competencies, operational procedures

and how it is financed.

• National Electricity Coordinator Rules and Reg-

ulations. On April 3, 2018, the Ministry of Energy

approved the rules and regulations of the National

Electricity Independent Coordinator Rules and Regu-

lations. This document establishes the organizational

structure of the Coordinator, its composition, opera-

tions and procedures to function correctly.

2018 Transmission
Expansion Plan

As part of the 2018 Annual Transmission Planning pro-

cess, the CNE called on all interested parties to present

their Transmission Expansion Project Proposals by April

30, 2018 as established by provisions of Article 91 of the

Electricity Law. Following the stages of the process, on

November 14, 2018, the CNE issued the Preliminary Tech-

nical Report on the 2018 Transmission Expansion Plan.

2018-2022 Electricity
Expansion Plan

On April 10, 2018, the Ministry of Energy published its ap-

•

Electricity Complementary Services, Storage

proval of the Long Term 2018-2020 Electricity Expansion

and Distribution Safety Rules and Regulations.

Plan in the Official Gazette. This is the first electricity plan-

On June 12, 2018, the Ministry of Energy approved

ning process to be carried out according to the provisions

the Electricity Facility Safety Rules and Regulation ap-

introduced by Law 20,936. This non-binding plan must be

plicable to electricity production, transportation, com-

prepared every five years as established by Article 83 of

plementary services, storage and distribution.

the Electricity Law.

2017 Transmission
Expansion Plan

On December 29, 2017, the regulatory authority published

Exempt Resolution CNE 770, issued the 2017 Preliminary

Technical Report on the Transmission Expansion Plan.

As established by Law, those who have an interest (duly

registered in the citizen participation registry) in the matter

presented their observations regarding the Plan. Once the

observations presented were evaluated, the CNE approved

the Final Technical Report of the 2017 Annual Transmis-

sion Expansion Plan. Those interested submitted their

discrepancies with the Plan to the Expert Panel in a public

hearing. As required by Law, following all stages of the pro-

cess, on November 8, 2018, the Ministry of Energy pub-

lished the 2017 Expansion Plan, identifying the expansion

plan of the National and Zonal Transmission Systems to be

tendered during the following twelve months.

Law 21,076 - Obligations
regarding Removal and
Replacement of Electrical
Connection and Meter

On February 27, 2018, Law 21,076 is published in the Offi-

cial Gazette. It modifies the Electricity Law by making the

distribution company finance the removal and replacement

of the electricity connection and meter when they are not

being used due to force majeure. The only Article of this

Law and its provisional articles states that connections and

meters are part of the distribution network and the owner-

ship of such equipment will change as they are replaced

when required by the electricity network.

104

Annual Report Enel Chile 2018Tariff studies ruled by
Article 187 of the Electricity
Law

On October 6, 2017, the CNE issued Exempt Resolution

CNE 560 that unanimously approves performing a New

Tariff Study as defined by Article 187, final part of the Elec-

tricity Law, subscribed by the CNE and the electricity distri-

bution companies. Within this context, in December 2017,

the CNE requests information regarding the distribution

companies´ investment plan and costs required to comply

with the Technical Norm on Electricity Distribution Service

Quality (approved by Exempt Resolution CNE 706 dated

December 7, 2017) not covered by the electricity supply

tariffs in force (Ministry of Energy Supreme Decree 11T,

2016).

On September 28, 2018, the Ministry of Energy published

Decree 5T in the Official Gazette. It updates Electricity

Ministry Decree 11T and therefore updates electricity dis-

tribution tariffs. These new tariffs will be in force until the

next tariff setting process. The enactment of this decree

represents the date in which the Service Quality Technical

Rule of Electricity Distribution referred to in the previous

paragraph becomes effective.

Law 21,118 – Amendment
to Regulatory Framework
of Residential Generators

On November 17, 2018, Law 21,118 was published in the

Official Gazette. It modifies the Electricity Law to encour-

age the development of residential generators. The main

changes introduced as incentive worth highlighting is the

increase in the maximum capacity of residential generation

equipment from 100 kW to 300 kW that allow netbilling.

c) Tariff reviews and
supply processes

c.1 Electricity distribution
tariff setting process

The tariff setting process for the 2016-2020 period con-

cluded with the publication of Decree 11T in the Official

Gazette on August 4, 2017, that set the distribution tariff

formulas effective, retroactively, from November 4, 2016.

On September 28, 2018, Ministry of Energy Decree 5T,

which replaces Decree 11T, 2016, became effective

updating electricity distribution tariffs until the next tariff

setting process.

c.2 Tariff setting process
of electricity distribution
related services

On July 24, 2018, the Ministry of Energy published Decree

13T in the Official Gazette. This decree sets the prices of

Non-Electricity Supply Services related to electricity distri-

bution. Such prices are applicable since the Decree was

published and are currently in force.

c.3 Tariff setting process of
zonal transmission

The Ministry of Energy published Decree 6T on October

5, 2018. This decree sets the annual value per section of

the zonal and dedicated transmission system, tariffs and

indexation formulas for customers subject to regulated

prices for the 2018-2019 period.

105

Industry Regulation and Electricity Industry Operationsc.4 Transmission tariff
setting process 2020-2023

ber 4, 2018, to invalidate the stages of the process car-

ried out to that date, referring back to the publication of

the preliminary technical report. Therefore, on October 5,

2018, the CNE published Exempt Resolution CNE 673 with

Within the context of the Electricity Transmission Tariff

a new Preliminary Technical Report that received the ob-

setting process for 2020-2023, the Rating of Transmission

servations of interested parties registered in the process.

System Installations process, the useful life setting process

On November 21, 2018, published Exempt Resolution CNE

of transmission facilities, and the Technical and Administra-

761 with the Final Technical Report of Rating Transmission

tive Terms required to carry out the Valuation of Transmis-

System Installations for the 2020-2023 period. According

sion System Installations are currently in progress.

to the stages of the process, the interested parties could

present their discrepancies to the Panel of Experts.

Within the context of the analysis and study of discrepan-

cies presented as part of the Transmission System Rating

Regarding the process of Setting the Useful Life of Trans-

process, the Expert Panel requested the CNE additional

mission Facilities, on June 5, 2018, the CNE issued Exempt

information. As a result of this request, the CNE detected

Resolution CNE 412 approving its Final Technical Report.

inconsistencies in the way the methodology to rate instal-

lations was being applied and consequently adopted an

The formalization of the Final Terms is pending the culmi-

administrative action to invalidate the rating process. The

nation of the Rating Transmission System Installations pro-

CNE published Exempt Resolution CNE 613 on Septem-

cess referred to previously.

106

Annual Report Enel Chile 2018c.5 Electricity tenders

Three tenders have been carried out under the new ten-

der’s law: Supply Tender 2015/01, Supply Tender 2015/02,

and Supply Tender 2017/01.

The 2015/02 tender began in June 2015 and concluded in

October 2015. It awarded three blocks for a total 1.2 TWh/

yr (100%) at an average 79.3 US$/MWh.

The 2015/01 tender began in May 2015 and concluded in

July 2016. It awarded five blocks for a total 12.4 TWh/yr

(100%) to 84 companies at a weighted average 47.6 US$/

MWh, adding new players to the market.

Enel Generación Chile was awarded the most, 5.9 TWh/

yr., representing 47.6% of the total energy awarded in the

2015/01 tender.

The supply tender 2017/01 began with the call in January

2017 and concluded in November 2017. It awarded a total

2,200 GWh/yr. (100%) to 5 companies at a weighted aver-

age 32.5 US$/MWh.

As in the previous process, Enel Generación Chile was

awarded the greatest amount, 1.2 TWh/yr., representing

54% of the total energy awarded.

107

108

Annual Report Enel Chile 201817

Electricity
generation

109

Letter from the Chairman Electricity Generation

Enel Chile and its subsidiaries have an electricity generation park comprised of 130 units spread out on the National Elec-

tricity System.

Generation Power Plants of Enel Generación Chile, Enel Green Power and subsidiaries are listed below:

Installed capacity (MW) (1)(2)
Power plant
Los Molles
Rapel
Sauzal
Sauzalito
Cipreses
Isla
Abanico
El Toro
Antuco
Ralco
Palmucho
Taltal
Diego de Almagro
Huasco TG
Bocamina
San Isidro
San Isidro 2
Quintero
Ojos de Agua
Pehuenche
Curillinque
Loma Alta
Pangue
Canela
Canela II
Tarapacá TG
Tarapacá carbón
Atacama
Eólica Los Buenos Aires
Eólica Talinay Oriente
Eólica Talinay Poniente
Eólica Taltal
Parque Eólico Renaico
Parque Eólico Sierra Gorda Este
Valle de los Vientos
Cerro Pabellón
Pilmaiquén
Pullinque
Carrera Pinto I Etapa
Carrera Pinto II Etapa
Chañares
Lalackama
Lalackama 2
Pampa Solar Norte
Parque Solar Finis Terrae
Solar Diego de Almagro
Solar La Silla
Total

Company
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
Enel Generación Chile
GasAtacama Chile
GasAtacama Chile
Enel Generación Chile
GasAtacama Chile
Pehuenche
Pehuenche
Pehuenche
GasAtacama Chile
GasAtacama Chile
GasAtacama Chile
GasAtacama Chile
GasAtacama Chile
GasAtacama Chile
Enel Green Power del Sur SpA
Parque Eólico Talinay Oriente S.A.
Empresa Eléctrica Paguipulli S.A.
Parque Eólico Tal Tal S.A.
Enel Green Power del Sur SpA
Enel Green Power del Sur SpA
Parque Eólico Valle de Los Vientos S.A.
Geotérmica del Norte S.A.
Empresa Eléctrica Paguipulli S.A.
Empresa Eléctrica Paguipulli S.A.
Enel Green Power del Sur SpA
Enel Green Power del Sur SpA
Empresa Eléctrica Paguipulli S.A.
Empresa Eléctrica Paguipulli S.A.
Empresa Eléctrica Paguipulli S.A.
Enel Green Power del Sur SpA
Enel Green Power del Sur SpA
Almeyda Solar SpA
Enel Green Power del Sur SpA

Technlogy
Hydroelectric
Hydroelectric
Hydroelectric
Hydroelectric
Hydroelectric
Hydroelectric
Hydroelectric
Hydroelectric
Hydroelectric
Hydroelectric
Hydroelectric
Fuel/Natural Gas
Fuel/Natural Gas
Fuel/Natural Gas
Coal
Fuel/Natural Gas
Fuel/Natural Gas
Fuel/Natural Gas
Hydroelectric
Hydroelectric
Hydroelectric
Hydroelectric
Hydroelectric
Wind
Wind
Fuel/Natural Gas
Coal
Diesel /Natural Gas
Wind
Wind
Wind
Wind
Wind
Wind
Wind
Geothermal
Hydroelectric
Hydroelectric Hidráulica
Solar
Solar
Solar
Solar
Solar
Solar
Solar
Solar
Solar

2017
18
377
77
12
106
70
136
450
320
690
34
245
24
64
478
379
399
257
9
570
89
40
467
18
60
24
158
781
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,351

2018 (3)
18
376
77
12
106
70
136
449
319
689
34
240
24
64
478
379
388
257
9
568
89
40
466
18
60
20
158
732
24
90
61
99
88
112
90
41
41
51
20
77
40
60
18
79
160
36
2
7,463

(1) These figures result from the maximum capacities determined by Enel Generación Chile’s Operational Norm No 38 “Regulation for
defining maximum capacity in the hydroelectric and thermal plants of Enel Generación Chile” as of December 31 each year. They are the
maximum design capacity of the generating units, corroborated with contractual satisfaction guaranteed tests made by the manufacturer
of the generating equipment, in most cases. In some cases, the figures of maximum capacity may differ from the capacity declared to the
regulatory authority and customers in each country. due to criteria defined by these entities and compliance to the corresponding contractual
frameworks.

(2) Enel Chile consolidates the installed capacity of Enel Green Power since April 2, 2018.
(3) There have been several changes in installed capacity in 2018 compared to 2017 because of maximum capacity test results of the Tarapacá
TG, Atacama, Taltal and San Isidro 2 power plants, among others, performed as determined by Technical Regulation of the National Electricity
System operator.

110

Annual Report Enel Chile 2018
In 2018, electricity sales of Enel Chile and its subsidiaries

reached 24,369 GWh, which represents a 34% share of

total sales on the National Electricity System (SEN in its

Spanish acronym) including sales to customers and net

sales on the spot market.

Enel Chile and
Subsidiaries' installed
capacity, generation
and energy sales

Installed capacity (MW) (1)

Enel Generación Chile

Enel Green Power

Total

Generation (2)

Enel Generación Chile

Enel Green Power

Total

Sales

Sales to end customers

Enel Generación Chile

Enel Green Power

Spot Market sales

Total

6,351

2017

17,073

2018

6,274

1,189

7,463

2018

17,373

2,673

20,046

742

603

1,174

23,356

24,369

1) These figures result from the maximum capacities determined
by Enel Generación Chile’s Operational Norm No 38 “Regulation
for defining maximum capacity in the hydroelectric and thermal
plants of Enel Generación Chile”, as of December 31 each year.
They are the maximum design capacity of the generating units.
corroborated with contractual satisfaction guaranteed tests made
by the manufacturer of the generating equipment, in most cases.
In some cases, the figures of maximum capacity may differ from
the capacity declared to the regulatory authority and customers
in each country due to criteria defined by these entities and
compliance to the corresponding contractual frameworks.

2) Refers to total generation after deducting own consumption and

transmission losses.

Operational
and
commercial
scenario

General view of
the operational and
commercial scenario

The National Electricity System began operations as the in-

terconnection of the SIC and SING in November 2017 and

therefore has been in operation for a full year for the first

time. This interconnection allowed both markets to work

as one, both operationally and commercially. The SIC, pri-

marily hydroelectric installed capacity, represented 75% of

rainfall during the fall and winter months and greater during

the last few months of the year, which resulted in overall

hydrology and hydroelectric generation to be slightly higher

than in 2017. NCRE generation was also higher in the SEN

during 2018, particularly solar, wind and biomass, allow-

ing thermal generation, mainly oil fueled and to a lesser

extent natural gas and coal, to decline. Consequently, the

system´s generation costs in 2018 were lower than 2017

despite the higher average fuel prices in 2018 when com-

pared to 2017, mainly oil, followed by coal and natural gas

that increased less.

111

2017

2018

the system´s total electricity generation and the SING the

remaining 25%. Hydroelectricity is therefore relevant to

22,615

22,592

the SEN. In 2018, hydrology was similar to 2017, irregular

Electricity GenerationTotal electricity demand picked up when compared to pre-

ii) Advantages to develop and operate renewable

vious years, increasing 4.2% in 2018 compared to 2.4%

generation projects, primarily solar and wind where

in 2017. Regulated customer demand decreased (near-

they present competitive advantages, such as, in the

ly 7%) while non-regulated customer demand increased

northern Chile regions for solar energy, and

significantly (nearly 15%) because a relevant number of

previously regulated customers chose to change to the

iii)

Integration of two markets that are significant in

nonregulated customer category and enter into electricity

terms of annual sales (roughly 70 TWh/yr. in 2018) but

supply contracts with distributors as authorized by regula-

different in terms of typology, that is, large regulated

tion. Our subsidiary, Enel Generación Chile, has the highest

customer consumption in the SIC and nonregulated

number of contracts within this segment of customers that

and mining customers in the SING.

chose to become non-regulated.

The commercial and operational challenge related to the

commercial flexibility allowing the Company to offer com-

integration of the SIC and SING is worth mentioning. The

petitive electricity supply contracts to customers in both

role of National Electricity Coordinator that programs and

systems, using its entire installed capacity (plants in SIC

coordinates the efficient and reliable operation of the sys-

and SING), which resulted in a favorable performance in

The interconnected system has provided Enel Chile greater

tem and the responsibility of the companies that partici-

2018 that is expected to continue.

pate in the electricity market to maintain their facilities in

operation as instructed by the Coordinator is a greater chal-

The business reorganization of Enel resulting from the suc-

lenge considering the differences in terms of generation,

cess of the Elqui Plan, perceived as favorable by the mar-

transmission, and electricity consumption of both systems,

ket, concluded on April 2, 2018, and transferred its own-

having to offer a continuous and stable supply in the SEN

ership share in Enel Green Power Chile (EGP Chile) and

that is so extensive, from the Atacama region in northern

Enel Generación Chile to Enel Chile, is worth highlighting

Chile to the Chiloe island in the south.

from a commercial perspective. It offered Enel Chile addi-

tional growth opportunities in non-conventional renewable

The interconnection of the SIC and SING was accom-

energy (NCRE) and also allowed coordinating operational

plished with a 1,300 km. 500kV transmission line from the

and commercial activities among both subsidiaries, which

Changos substation located north of Antofagasta to the

has had positive effects on both companies´ commercial

Polpaico substation located north of Santiago. By the end

margin. The development of EGP Chile´s NCRE projects

of 2018, the section that extends up to the Pan de Azucar

will offer synergies and strengthen Enel Generación Chile´s

substation, near Coquimbo was completed. The remain-

commercial standing and leadership position in the Chil-

ing section from Pan de Azucar to Polpaico is expected

ean electricity industry by offering its supply contracts

to be completed in 2019. Once the project is finalized the

sustainable and competitive capacity back up. The integra-

transmission capacity is expected to reach 1,500 MW by

tion of the SIC-SING also makes uploading the electricity

2020. The advantages of the National Electricity System

produced by the NCRE power plants of EGP Chile in the

that have been pointed out are the following:

northern region of the country easier. During 2018, nearly

63% of the roughly 3.5 TWh generated by EGP Chile was

Greater supply reliability and efficiency by allowing a

commercialized by Enel Generación Chile, which optimizes

bi-directional exchange of electricity between the SIC

the portfolio Enel Chile offers its clients.

and the SING

2 Source of demand figures is the December 2018 Coordinator Report submitted to the CNE

112

Annual Report Enel Chile 2018Main events that
affected operational
and commercial
performance

Regarding production and market risk, we consider the fol-

lowing the most relevant factors:

Hydrology variability, a risk that is reduced by perma-

nently analyzing and designing sales contracts that

commit to an optimum level of energy sales.

ii) Commodity variability risk, mainly the price of fuels

The Company reached high standards of commercial and

that directly affect Enel´s thermal production costs

operational performance in 2018, as in previous years, and

and the sales price indexation clause of some of our

maintained its solid leadership position in the Chilean elec-

supply contracts.

tricity industry. The factors worth highlighting that sub-

stantiate this position are:

iii) Currency variability risk, mainly the price of the United

States dollar that has an impact on the revenue of the

Significant and technologically diversified, sustainable

Company.

generation capacity, mainly comprised of efficient hy-

droelectric and thermal plants, which allow the com-

Commodity (mainly coal, natural gas and oil) and currency

pany to be very competitive and generate at low aver-

(US dollar) variability risk has been managed by the Com-

age operating costs.

pany, in coordination with the parent company in Italy, us-

ing financial instruments that had a positive impact on the

ii)

Production processes and maintenance and modern-

Company´s margin in 2018.

ization policies fully comply with technical and envi-

ronmental standards established by the applicable

regulation allowing the Company´s generation facili-

ties to operate with high availability and reliability lev-

els.

iii) The commercial policy is defined to be consistent

with the production characteristics of the Company’s

power plants and is permanently adjusted to the in-

creasingly competitive and changing market condi-

tions. The goal of such policy has been to combine

achieving an attractive return with a low exposure to

production and market risk.

iv)

Innovation is a priority for the Company and therefore

it is constantly adapting to new market challenges.

For example, the reorganization of its generation busi-

ness model previously mentioned (subsidiaries EGP

Chile and Enel Generación Chile) allows sustaining fu-

ture growth and competitiveness in the industry.

Hydrologic condition

Hydroelectricity represents a significant portion of Enel

Chile´s generation mix and has a significant direct impact

on the Company´s margin. Therefore, a detailed discussion

on the hydrologic condition is relevant to the Company.

Hydrology in 2018 was similar to 2017. Rainfall and water

availability were irregular when compared to expectations.

The first part of 2018 was quite dry, with rainfall below the

normal level during the winter months until august. The

Niño phenomena in spring brought a higher amount of rain

during the last four months of the year partially reversing the

dry trend present in previous months and ending the year

with a level of hydrology above 2017. Consequently, the first

eight months of the year were dry with low water inflow

and high average accumulated exceedance probability,

roughly 81%. The last four months of the year, the snow

melting season, was better, consistent with an “average”

exceedance probability of roughly 65%, which led to a

significant recovery of reservoir levels, which resulted in

a 75% total accumulated exceedance probability, similar,

although slightly better than in 2017 (78%).

113

Electricity GenerationGeneration and
electricity supply costs

nearly 18% higher than the 9,7 TWh generated in 2017.

This additional 1.7 TWh generated had a positive impact

on the Company´s margin. Enel Chile´s thermal generation

decreased 14% from 7.3 TWh in 2017 to 6.3 TWh in 2018,

mainly due to less natural gas fueled generation (nearly -0.8

Electricity generation in the SEN, the integrated SIC and

TWh). Own NCRE generation (wind, solar, geothermal)

SING, in 2018 was 76.5 TWh, which represents a 3.1%

reached 2.3 TWh in 2018 as a consequence of the addition

growth rate when compared to 2017. The SIC contributed

of EGP Chile power plants to Enel Chile´s generation fleet.

75% of total generation and the SING, the remaining 25%.

Hydroelectricity represented 30% of total generation (23.2

During 2018, the average price of fuels increased when

TWh), thermal electricity accounted for 53.2% (41 TWh),

compared to 2017. Coal was once again the predominant

primarily coal (a total 38 %, similar amount from plants

fuel in electricity generation in the SEN and its average

in SIC and SING), followed by natural gas (15%). A total

price, according to authority statistics, increased 11.5%

16.5% came from non-conventional renewable sources

from an annual average 117 US$/ton in 2017 to roughly

(12.5 TWh); solar (7%), wind (5.1%), biomass (4.1%) and

131 US$/ton in 2018. Regarding the price of natural gas,

geothermal (0.3%).

although the purchase prices of Enel Chile are confiden-

tial, according to information provided by the electricity au-

The hydrology during 2018, the availability of NCRE during

thority, the henry hub that is the price used in the industry

the year and the integration of the SIC and SING allowed

for this fuel, increased 5.4% on average in 2018 from 2.97

hydroelectricity and NCRE in the SEN to increase (6.4% or

US$/MMBTU in 2017 to 3.13 US$/MMBTU in 2018. Liquid

1.4 TWh and 25% or 2.5 TWh, respectively). Thermal elec-

fuel as an electricity generation source was used very little

tricity, on the other hand, dropped 3.7% (1.6TWh).

for electricity generation in the SIC. Average prices of liquid

fuels during 2018 increased significantly, diesel 25% and

Worth mentioning is the performance of the SIC and SING

fuel oil 29%.

separately. Energy supplied by the SIC increased 4.7%

(from 55 TWh in 2017 to 57.5 TWh in 2018). On the oth-

Despite the drop in thermal generation in the SEN, the in-

er hand, energy supplied by the SING decreased 1.2%

crease in the price of fuel increased the average cost of

(from 19.2 TWh to 19 TWh). Hydroelectricity in the SIC

thermal generation and therefore increased the average

amounted to 23.1 TWh, 6.4% more than in 2017; thermal

price of electricity in 2018. The annual average price of

electricity generation reached 24.4 TWh, 3.7% less than

energy at the Alto Jahuel, Cerro Navia and Polpaico sub-

in 2017; NCRE generation amounted to 9.8 TWh, 25.5%

stations, nodes (220 kV) that are representative of the con-

more than in 2017. Thermal energy supplied by the SING

sumption in the metropolitan area, increased 9.2% from

reached 16.2 TWh, 4.6% less than in 2017, mainly because

58.3 US$/MMBTU in 2017 to 63.7 US$/MMBTU in 2018.

coal generation fell 1.8 TWh. NCRE generation in the SING

The average price at the Charrúa substation, where several

amounted to 2.8 TWh, less than the NCRE generation in

important Enel Generación power plants connected to the

the SIC, but 25% more than in 2017.

SIC (Concepcion) inject their generation, increased 10.5%

(from 55 US$/MMBTU to 61.2 US$/MMBTU). The oppo-

Enel Chile generated 20 TWh, excluding the generation of

site occurred in the SING, that is, at the Crucero substa-

the Nueva Renca power plant related to the maquila agree-

tion, representative of the consumption in such area, the

ment, which represents 26% of the SEN´s total generation

average annual price decreased roughly 4.5% (from 55.2

and 31% of the SIC and is greater than the 17.1 TWh pro-

US$/MMBTU to 52.9 US$/MMBTU) due to greater NCRE

duced in 2017. The Company´s Hydroelectric generation

generation in 2018, replacing thermal generation.

reached 11.4 TWh, representing 14.4% of the SEN and is

114

Annual Report Enel Chile 2018The relevance of
liquefied natural
gas (LNG)

Enel Chile entered the LNG market in 2009 through its

subsidiary Enel Generación Chile when the GNL Quinte-

ro Regasification Terminal began operations, which was a

project of national interest that required a significant public

and private effort to ensure the country a supply of natural

gas since the Argentine supply had been interrupted.

Enel Generación Chile, Metrogas, and Enap, jointly promot-

ed the development of the GNL Quintero Terminal, a facil-

ity that has played a crucial role in the supply of energy to

the central region of Chile for both residential and industrial

customers and also for the electricity system as a whole.

The electricity generated by the Nueva Renca facility that is

considered to be Enel Chile´s generation due to the rental

agreements of the thermal power plant Nueva Renca with

AES Gener and latter with Empresa Eléctrica de Santiago

when it changed ownership to AME (Empresa de Merca-

do Eléctrico S.A), amounted to 0.5 TWh and along with

the electricity generated by San Isidro and Central Quinte-

ro (roughly 3.7 TWh) totaled 4.2 TWh generated by Enel

Generación with natural gas. This figure represented 5.5%

of the SEN´s annual generation, including all generation

technologies.

In terms of gas commercialization in 2018, Enel Chile

through Enel Generación Chile sold five LNG shipments,

including the sale of two shipments of LNG to Enel Trade to

be delivered in the United Kingdom, continuing with inter-

national trading transactions outside Latin America related

to the BG contract to relevant international markets.

During 2018, the Quintero terminal unloaded 44 shipments

of natural gas, a total 3,523 MMm3. Of that amount 1,096

MMm3 were for Enel Generación Chile, to satisfy its com-

mercialization and electricity generation requirements.

Roughly 692 MMm3 of gas belonging to other partners of

the terminal, were sold to other generators connected to

the SEN to generate electricity.

Also, Enel Generación Chile along with ENAP and Age-

sa (company related to Metrogas) reached a new export

agreement Enarsa (with Empresa Nacional de Energia Ar-

gentina), to export natural gas from the Quintero terminal

to Argentina I 2018. Natural gas exported amounted to

90.6 MMm3. Enel Generación Chile contributed with 55%

of such amount.

In terms of electricity operations, the availability of LNG

provided by the long-term supply contract with BG Global

Energy Ltd (BG) was key to compensate for the lower level

of hydroelectricity available during most of the year due to

the dry conditions present during the winter months.

Regarding natural gas supply (NG), a new scenario of co-

operation and energy integration among private and public

authorities of Chile and Argentina allowed reactivating the

import of natural gas from Argentina to Chile that was in-

terrupted for eleven years. Within this context, Enel Chile,

through its subsidiary Enel Generación Chile, signed an

interruptible natural gas supply agreement with YPF and

Total Austral and obtained the respective export permits in

Argentina to begin to supply the San Isidro power plant on

December 28, 2018.

In 2018, the Company signed a terminal use agreement,

TUA, with GNL Mejillones once again that allowed unload-

ing an LNG shipment. This transaction allowed renewing

natural gas sales contracts with mining and industrial cus-

tomers located in northern Chile making Enel Chile the

main industrial gas trader in northern Chile. It also made

natural gas available for the generation units of Enel Chile

(Taltal and GasAtacama) connected to the northern gas

pipeline network.

The commercialization of LNG in trucks increased 30% in

2018 when compared to 2017. Agreements were signed to

deliver LNG to two new cities, in addition to the 5 existing

ones, allowing the company to maintain its relevant posi-

tion in this market.

Enel Generación Chile has continued consolidating its

position as a relevant player in the gas market in Chile,

innovating and expanding its activities in the commercial-

ization of gas and LNG in the local and international market.

115

Electricity Generation
In the
commercial
front

The commercial actions carried out by Enel Chile through its

subsidiary Enel Generación Chile in 2018 were consistent

with its commercial policy. The commercial policy focuses

on accomplishing the following goals: maintain industry

leadership; adequately manage risk and return under the ex-

isting supply and competitive market conditions; implement

plans to strengthen customer loyalty, add additional new

customers, increase energy sales and increase commercial

management efficiency within the company. The main ac-

tions carried out are described below.

New electricity supply contracts were signed with important

nonregulated industrial customers for nearly 580 GWh/yr.

with terms that go from 9 to 15 years. Important contracts

were also signed with distribution companies to supply their

nonregulated customers for 420 GWh/yr. with a 5 to 8-year

term.

As a consequence of a change in regulation in Chile allowing

smaller customers to choose to be either regulated or non-

regulated, Enel Generación Chile signed approximately 150

electricity supply contracts in 2018 with smaller nonregulated

customers for a total 800 GWh/yr. for a 5-year term.

In November 2018, the Company revealed having signed

an electricity back up supply contract with the generator

Engie to supply electricity to regulated customers. Enel

Generación Chile was awarded a contract with an average

1,200 GWh/yr. for a 12-year period to begin supply in 2019.

116

Annual Report Enel Chile 2018Enel Chile projects
under construction and
optimization

Los Cóndores Project

The Los Cóndores hydroelectric power plant project is lo-

cated in the San Clemente district, in the Maule river basin

in Chile´s seventh region. It is a pass-through hydroelectric

power plant with installed capacity of approximately 150

MW, which has 2 vertical axle Pelton units that will utilize

water from the Maule lagoon reservoir. The plant will be

connected to the national electricity network by an 87 km

transmission line to the Ancoa substation.

The environmental qualification resolutions required for

the power plant and the transmission line were obtained

in 2011 and 2012 respectively. In 2014, the hydraulic works

plan of the project was approved.

By the end of 2018, the physical progress of the project

was 65.6%, the excavation of the tunnel reached 9.4 km,

the civil works of the underground powerhouse cavern had

concluded, and the installation of electromechanical equip-

ment was advanced. Regarding the transmission lines,

90% of the structure was assembled and 42 km of cable

have been installed.

The total investment accrued as of December 31, 2018

was Ch$ 419,021 million.

Central Sauzal Smart
Repowering Project

The Smart Repowering project of Central Sauzal involves

the modernization and repowering of specific systems

and equipment of the Central Hidroléctrica Sauzal. This

power plant is located in the Libertador General Bernardo

O´Higgins and Region has been in operation since 1948. It

has three generation units with vertical axis Francis type

turbines. The Smart Repowering project consists in the

replacement of two of the existing turbines, to increase

the efficiency of the units and add an additional 3MW of

capacity and an additional 13.7 GWh/yr. generation.

The first unit is programmed to be repowered in 2019 and

the second unit in 2020. The major contract was signed

with Voith and covers the detail engineering, manufactur-

ing, installation and start up of the new equipment of both

turbines. The design, purchase and manufacturing of the

components of the first unit was performed in 2018. The

overall progress on the contract by December 2018 was

37%. The accumulated investment by December 2018

was Ch$ 1,206 million.

117

Electricity GenerationOptimization of
Bocamina´s second unit

Bocamina is a coal fired generation power plant located

in the Coronel district (Concepción. southern Chile) com-

prised of two units, 128 MW and 350MW.

Main progress in 2018 was the following:

•

A Temporary Approval Certificate was issued on June

15, 2018, one month before projected.

The Final Approval Certificate of the south dome was re-

ceived on October 17, 2018.

Bocamina unit 2 began commercial operations in October

2012 but was interrupted in December 2013 due to a judi-

cial order issued by the Concepcion Court.

Bocamina´s Landfill
Closure Plan

Enel Generación Chile submitted a new environmental im-

The objective of the Plan is to close the landfill of ashes

pact study (EIA in its Spanish acronym) in December 2013,

applying worldwide best practices. The first stage involves

proposing a technical optimization plan. The EIA was ap-

areas 1 and 2 and other improvements to installations and

proved on March 16, 2015 and obtained the Environmental

operations. These works will allow the company to improve

Commitment Resolution (RCA in its Spanish acronym) ap-

and comply with standards established by the Environmen-

provalon April 2, 2015.

tal Permit (Resolution 128, 2015).

The technical optimization plan involves the following:

The project Is structured in two stages:

•

Dome on the south field: after completing the dome

•

Stage 1: Closure of areas 1 and 2 and the wing of area

on the north field In 2017, the construction of the south

1, a total 48,000 square meters.

dome was completed in 2018, reaching a total 270,000

•

Stage 2: Closure of area 3

tons coal storage capacity. The construction of the

south dome recorded 1.5 million-man hours without

The basic design of the plan has concluded, and the major

accidents with many works performed at height.

works are currently being tendered.

118

Annual Report Enel Chile 2018Campos del Sol I Project

The Campos del Sola I project Is located In the Atacama

Region, in the northern part of Chile. It is a 381.9 MW solar

power plant that is expected to begin commercial opera-

tions in 2021. It has received environmental approval and

The Renaico II project includes two wind farms developed

separately that will be added to the existing installed ca-

pacity in Renaico (currently operational). EGP Chile devel-

oped the Las Viñas part of the project. The rest was of the

project was developed with Pacific Energy (Parque Eólico

Puelche) in an abandoned industrial site and will be sold to

EGP Chile. The power plant will be owned and operated by

the energy supply contracts have been confirmed for the

2021-2045 period. The project offers potential synergies

EGP Chile.

with the Carrera Pinto solar project that is already opera-

tional. The total investment is expected to be roughly US$

320.9 million.

Renaico II Project

The Renaico II project is located In the Araucanía Region,

in the southern part of Chile. It is a 133 MW wind farm

that is expected to begin commercial operations in 2021.

It has received environmental approval and offers potential

synergies with the Renaico I wind farm (including the sub-

station and the transmission line). The total investment is

Cerro Pabellón 3 Project

The Cerro Pabellón 3 project is located In the Antofagasta

Region, in the northern part of Chile. It is a 33 MW geo-

thermal power plant build next to the existing 41 MW Cerro

Pabellón plant in operations. It has received environmental

approval and is expected to begin commercial operations in

2020. The plant offers potential synergies with the existing

Cerro Pabellón facility and will use the existing infrastruc-

ture (including the substation and the transmission line).

The total investment is expected to be roughly US$ 95.8

expected to be roughly US$ 176 million.

million.

119

Electricity Generation
Enel Chile projects
under study

Hydroelectric
Project Vallecito

The project is located in the Maule Region, specifically on

the upper basin of the Maule River. It is a pass-through

hydroelectric power plant with nearly 55 MW installed

capacity. The energy it produces will be supplied to the

interconnected system using the line that is currently in

construction to evacuate electricity from the Company´s

Los Cóndores Hydroelectric power plant.

Since 2015, Vallecito has been developed based on sus-

tainable criteria, which consists of defining the technical,

economic, environmental and social aspects of the project

considering high sustainability standards. This project has

included community collaboration processes that have con-

tributed to a shared vision of the territory, and to identify

the activities to be carried out in each of nine communities

of the Pehuenche Route.

The basic engineering studies were performed in 2017,

the environmental campaigns concluded, and the imple-

mentation of the sustainable development plan began by

supporting the activities defined as a shared vision for the

territory.

Based on the commercial opportunities envisioned for

Vallecito, the next step will be the preparation of the en-

vironmental studies to present to the authority, once the

design of the project, defined along with the community,

has concluded.

Smart Repowering
Projects

The Company is currently evaluating repowering projects

to increase the installed capacity or generation of power

plants already in operations by replacing certain parts or

improving the power plant´s hydraulic potential.

120

Annual Report Enel Chile 2018Antuco Smart
Repowering

Taltal Optimization
Project

The project is to be developed at the Antuco power plant

The project is located in the Antofagasta Region. It is an

which is in operations and located in the Bio-Bio Region.

The project involves replacing a turbine that was installed

in 1981 and has an 88% load factor. The new turbine is

expected to reach a 94% load factor generating an addi-

tional 21 GWh. The investment is expected to amount to

US$ 14.48 million and to begin in 2019. The new turbine is

expected to begin operations in 2020.

Quintero Combined
Cycle Project

The project is located in the Valparaiso Region. It involves

installing a 130 MW steam turbine and its generator that

will use the heat generated by the existing gas turbines

(257 MW). In August 2018, the project was postponed,

and the environmental studies were discontinued.

The final investment decision regarding this project will de-

pend, among other things, on the commercial opportunities

foreseen for the following years, such as, the prices of future

tenders to supply the electricity required by the regulated

market and/or existing or new nonregulated customers.

Central Taltal Battery
Energy Storage System

On April 13, 2018, Enel Generación Chile submitted the

project entitled," BESS Battery Energy Storage System at

Central Termoeléctrica Taltal" to the Environmental Impact

Agency (SEA in its Spanish acronym). The project involves

the installation of a 12 MW battery that would allow offering

services to improve security, quality and efficiency to the

SEN, such as, energy arbitrage and compensation of fre-

quency variations, among others.

On May.25, 2018, the environmental authority referred to

above issued Exempt Resolution 106/2018 stating that the

project is not to be submitted to the Environmental Impact

Evaluation System before its construction because it does

not involve a material change to Central Taltal.

energy efficiency project that uses the heat generated by

the existing gas turbines to produce steam. This is done by

installing a steam turbine and its generator, which allows

converting the existing Taltal open cycle plant into a gas-

fired combined-cycle plant.

The environmental permit requested through the Environ-

mental Impact Declaration submitted to the authority in

December 2013 was approved in January 2017.

Any decision related to the construction of this project will

depend, among other things, on the commercial opportuni-

ties envisioned for the following years, such as, the prices

of future tenders to supply the electricity required by the

regulated market and/or existing or new nonregulated cus-

tomers.

Ttanti Combined
Cycle Project

The Ttanti project is to be developed in the Antofagasta

Region, on land adjacent to the existing Atacama power

plant that is located in the industrial zone of the city of Me-

jillones. The project involves the construction of a natural

gas combined-cycle power plant with an installed capacity

of 1,290 MW (three units with 430 MW each).

On December 28, 2017, the Environmental Evaluation

Commission of the Antofagasta Region voted in favor of

the power plant’s environmental approval.

Any decision related to the construction of the project

will depend, among others, on the commercial opportu-

nities foreseen in the upcoming years, e.g., prices in fu-

ture tenders for supplying the energy requirements of the

regulated market and/or negotiations with existing or new

unregulated customers.

121

Electricity Generation
Central Tarapacá Battery
Energy Storage System

Enel Generación Chile is analyzing the installation of a bat-

tery energy storage system (BESS) to the Tarapacá thermal

power plant to provide the ancillary services that the Nation-

al Electricity System could require in upcoming years.

The project involves the installation of a BESS with about

14 MW of installed capacity and 7 MWh of energy storage

capacity, connected to the 11.5 kV bar of the existing 23

MW capacity turbine installed in the power plant.

In December 2017, the SEA of the Tarapacá Region issued

a resolution waiving the obligation to submit the project to

environmental assessment before its construction. Despite

this fact, any decision related to the construction of the project

will depend, among others, on the commercial opportunities

foreseen in the upcoming years and, particularly, on the

evolution of the regulatory framework for the provision and

remuneration of the ancillary services.

Land reserved for
future projects

As of December 2018, Enel Generación Chile held

approximately 48.3 hectares of immovable property (or

land) to develop future natural gas or hydroelectric projects.

These assets are located in the Antofagasta Region (6.3

hectares) and the Los Lagos Region (42 hectares).

Azabache

The project is located in the Antofagasta Region. It is

a 63 MW solar power plant that is expected to begin

operations during the last quarter of 2021. The lot and the

environmental approvals have already been obtained. The

project offers significant synergies with the Finis Terrae

plant, owned by Enel Green Power and already in operation,

and will use the same transmission infrastructure. Azabache

and Valle de los Vientos, together will be the first hybrid,

industrial scale, power plant in Chile. The total investment

is expected to reach US$ 48.96 million of which US$ 0.34

million have been booked as of December 31, 2018.

Valle del Sol

The project is located in the Antofagasta Region. It is a

116 MW solar power plant that is expected to begin op-

erations during the last quarter of 2023. The lot and the

environmental approvals have already been obtained. The

project offers significant synergies with the Finis Terrae

plant, already in operations, owned by Enel Green Power.

The total investment is expected to amount to US$ 91.4

million of which US$ 0.79 million have been booked as of

December 31, 2018.

Finis Terrae Extension

The project is located in the Antofagasta Region. It is a 126

MW solar power plant that is expected to begin operations

during the last quarter of 2021. The lot and the environ-

mental approvals have already been obtained. The proj-

ect offers significant synergies with the Finis Terrae plant,

owned by Enel Green Power and already in operation, and

will use the same transmission infrastructure. The total

investment is expected to amount to US$ 94.4 million of

which US$ 0.09 million have been booked as of December

31, 2018.

122

Annual Report Enel Chile 2018Sol de Lila

The project is located in the Antofagasta Region. It is

a 122 MW solar power plant that is expected to begin

operations during the last quarter of 2023. The lot and the

environmental approvals have already been obtained. This

project will possible connect to the Argentine transmis-

sion system. The total investment is expected to amount

to US$ 97.9 million of which US$ 0.81 million have been

booked as of December 31, 2018.

Flor del Desierto

The project is located in the Antofagasta Region. It is a 50

MW solar power plant that is expected to begin operations

during the last quarter of 2023. The lot and the environ-

mental approvals have already been obtained. The total

investment is expected to amount to US$ 39.4 million of

which US$ 0.31 million have been booked as of December

31, 2018.

Los Manolos

The project is located in the Antofagasta Region. It is a 50

MW solar power plant that is expected to begin operations

during the last quarter of 2023. The lot and the environ-

mental approvals have already been obtained. The total

investment is expected to amount to US$ 62.6 million of

which US$ 0.33 million have been booked as of December

31, 2018.

123

Electricity Generation124

Annual Report Enel Chile 201818

Electricity
distribution

125

Letter from the Chairman Enel Chile participates in the distribution business through its subsidiary Enel Distribución Chile. Enel Chile’s has a 99.1%

direct interest in Enel Distribución Chile.

Enel Distribución Chile’s concession is a high-density consumption area. It concentrates a large proportion of the country’s

population, businesses parks, industrial parks, small industry and commercial activities.

Other electricity distribution Groups that participate in the electrical system are: Chilquinta Energía, CGE Distribución,

Sociedad Austral de Electricidad and Empresa Eléctrica de la Frontera.

Enel Distribución Chile

Enel Distribución Chile is the largest electricity distribution

other matters, the terms of the “Costs Study of Electricity

company in Chile in terms of electric energy sales. It oper-

Distribution-Related Services” as part of the 2016-2020 tar-

ates in 33 districts of the Metropolitan Region and its con-

iff setting process. The terms identify five new electricity

cession area covers more than 2,105 square kilometers,

distribution-related services of which the most significant

including the areas covered by its subsidiaries Empresa

are “Construction and installment of temporary junctions”

Eléctrica de Colina Ltda., Luz Andes Ltda. and Empresa de

and “Lease of temporary junctions”.

Transmissión Chena S.A.

The “Final Electricity Distribution-Related Services Cost

In 2018, the Company provided electricity to 1,924,984

Study Report” was published on January 20, 2017. As

customers, 2.3% more than in 2017. Of total customers,

determined by the established process, Enel Distribución

89.6% are residential customers, 7.7% are commercial

Chile presented its observations on the Report.

customers, 0.7% are industrial customers and 2.0% are

other customers. During 2018, Enel Distribución Chile sold

Later, the CNE approved the Technical Report entitled

16,782 GWh to its final customers, which represents a

“Tariff Formulas of Non-Electricity Supply Services, related

2.1% increase when compared to 2017.

to Electricity Distribution” through Exempt Resolution CNE

213 dated April 27, 2017. To the date of this report, the tariff

Enel Distribución Chile successfully fulfilled the objectives

decree with the new tariffs is pending. Enel Distribución

of its losses Plan to keep losses at economically acceptable

Chile also presented its observations on this Report, as es-

levels. As of December, the TAM metric was 5.0%.

tablished by the rules of the process.

Distribution tariffs are set every four years based on cost

Decree 5T, issued by the Ministry of Energy, became ef-

studies conducted by specialized consulting firms. In late

fective September 28, 2018, and updates Decree 11T,

2015, the CNE issued R.E. CNE 699 that informs, among

2016 issued by the same Ministry, adjusting electricity dis-

tribution tariffs until the next tariff setting process.

126

Annual Report Enel Chile 2018Infrastructure and
network projects

Smart Meters Project

Enel X Chile

Enel X was created as part of the Company´s “Open Pow-

er” strategy, to open electricity to new uses, technologies,

associations, services and more people. Its businesses are

The Enel group has more than 40 million smart meters in

segmented in 4 categories: e-City, e-Home, e-Industries y

operation in the world, especially in Italy and Spain. This

e-Mobility.

smart meter solution involves new meters, data concen-

trators, telecommunications infrastructure and centralized

systems that allow remote and automated (reading, discon-

nections, reconnections, and tariff changes) management

e-City

of meters through a two-way information flow. It also al-

It seeks to transform cities to make access to services

lows customers to install solar panels and inject their sur-

easier for individuals by developing technological solutions

plus energy into the distribution network without the need

related to lighting, safety and energy efficiency with

of any additional equipment.

different public bodies. .

The Smart Meter Massification Project continued during

2018 and installed a total 190,846 meters and 1,900 con-

centrators within 32 districts of the concession area reach-

e-Home

ing a total accumulated 291,731 meters, 2,300 concentra-

It seeks to transform homes by implementing innovative

tors and also 1,600 safety inspections. The complaints rate

and efficient solutions to increase safety and efficiency

of the more than 29,000 quality control inspections was

focusing on the specific needs of homes and families such

0.53%.

as, air conditioning, water heating, led lighting, among

others. It´s goal is also to stand out in the B2C market for

its high installation and maintenance standards.

127

Electricity Distributione-Industries

It seeks to transform companies through comprehensive

projects that include expert services, and the implementa-

tion and control of all services within the scope of B2B. It

focuses on technologies related to energy efficiency, dis-

tributed generation and electricity projects, and demand

management, among others. It also intends to differentiate

each company.

e-Mobility

e-Home – Business to
Customers Projects

Peñalolen FIE Project

This initiative is part of the “Energetic District” Program

of the Ministry of Energy. This project was made possible

by the Strategic Investment Fund, FIE (in its Spanish ac-

ronym), which is a public policy tool to finance proposals

focused on improving productivity, diversifying la produc-

tive base and increase the aggregate value of the economy.

The funds were managed by the Chilean Energy Efficiency

It seeks to transform the means of transportation by offer-

Agency, AChEE (in its Spanish acronym) on a competitive

ing products and services that promote the development

basis.

of electric mobility and supplement such services with

private and urban charging infrastructure and new technol-

The plan involves the installation of photovoltaic panels in

ogies. It also intends to promote electric public transpor-

6 schools in Peñalolen. In one school, traditional lighting

tation offering comprehensive solutions to transportation

was replaced with led lighting and therefore increased the

operators.

school´s efficiency.

128

Annual Report Enel Chile 2018School

Technology

Escuela Tobalaba

Photovoltaic panels

Centro Educación Valle
Hermoso

Colegio Likankura de
Peñalolén

Escuela E-180 Matilde
Huici

Photovoltaic panels

Escuela Juan Bautista
Pastén

Photovoltaic panels + led
lighting

Escuela Unión Nacional
Árabe

Photovoltaic panels

Installed
Capacity
(kWp)

Replacing Wood Heaters
with Air Conditioning

We have performed 9 replacement projects in industries

with significant gas and particle emissions. A total 2,545

wood heaters have been removed in the residential sec-

tor to compensate industrial emissions. The contribution

to local decontamination is considerable: over 53 tons of

particulate matter a year has been removed from the en-

vironment

Air Conditioning Systems

We offer high-end air conditioning solutions to residential

customers. It is leading brand, premium equipment that is

100% efficient (Category A) and uses only R-410 ecologi-

cal coolant. It offers customers different comfort and ef-

ficiency modes, such as, Hot-Cold, Far-Infrared heat, ON-

OFF, Inverter with Wi-Fi control, consumption analysis and

The pilot project to replace wood heaters with air condi-

Wind-free mode with 21,000 micropores that make the air

tioning, opens electricity to new uses and contributes to

flow almost imperceptible.

the decontamination of cities and has consolidated a suc-

cessful business, that adds value to the company, to our

During 2018, we sold more than 15,000 devices to our cus-

customers and the environment.

tomers.

129

Electricity Distributione-Industries – Business
to Business Projects

We have been successful at managing the opportunities

and energy needs of our customers through our e-indus-

tries business by offering products and services that opti-

mize the use and cost of electricity.

Hybrid Energy Efficiency
Solution –Cumbres Terrafirme
Condominium

The first condominium of homes with these three tech-

nologies, opening the entire real estate market (buildings

and condominiums) to these technologies. It is an indi-

vidual home solution that includes a vertical heat pump

with a hot water tank to cover sanitary consumption, a

1.02 kW photovoltaic installation and automation devices

for lighting, security, and sensors.

Smart Buildings and
Energy Efficiency Luis
Valenzuela Building
(CIDEPA)

This project integrates three electricity generation tech-

nologies into a hybrid residential solution that includes a

solar photovoltaic system with a solar thermal system con-

nected to an aerodynamic heat pump. Each apartment will

also have an automated system and the thermal plant is

monitored online. Smart and efficient buildings, tech city

friendly.

SURA-SENCORP Project
New Córdova Building

This is a façade (138 MW) and rooftop (58.8) On Grid

self-consumption solar project. This solar system is moni-

tored online using inverters and connected to the Building

Management System of the building.

130

Annual Report Enel Chile 2018PEPSICO solar photovoltaic
Project

The technology of these electro terminals includes unique

intelligent load management controls that will be capable

of effectively managing the electricity supply of buses in

real time therefore optimizing electricity consumption.

This is a 210.6 MW rooftop solar photovoltaic solution with

multi string inverters to optimize its generation that amounts

to approximately 364.6 MWh for self-consumption of the

Pepsico plant located in Cerrrillos, Metropolitan Region.

Electric Mobility

Public Transportation
Charging Intraestructure

The modernization of the infrastructure is vital and there-

fore Enel X built the first electro terminal in the Peñalolen

district. It has 63 chargers for buses and solar parking lots.

They are structures designed to handle photovoltaic pan-

els that generate electricity using renewable sources sup-

plying buses and the consumption of the electro terminal

itself. Also, 37 additional chargers are available at another

electro terminal located in Maipú.

Public Transportation
Charging Intraestructure
for Private Transportation
Users

During 2018, a total 72 residential chargers were commer-

cialized of which 50 were infrastructure and installation

projects. These wallboxes are the most convenient and

reliable solution for customers and has strengthened the

relationship with our partners: BMW, Nissan, Renault, and

Mitsubishi by helping them offer their customers a better

electro mobile experience.

The Company implemented a public charger project with

BMW Chile to extend the public charging network by in-

stalling 9 new public chargers in Santiago, Viña del Mar

and Concepción.

131

Electricity Distribution132

Annual Report Enel Chile 201819

Environment and
Sustainability

133

Letter from the Chairman Environmental
Management Highlights

Environmental protection is a major pillar in Enel´s strategy.

Hence, they have directed their efforts towards constant

improvement by searching for potential efficiencies in their

processes and products, incorporating cutting-edge tech-

nology. Their purpose is not just to comply with norms and

reduce environmental externalities, but also to take care of

their environment.

Implementation of
the Integrated Model
for Environmental
Measurements (MIMA)

Enel's policy and internal process implementation does not

each power plant’s environmental commitments, which is

just focus on reducing environmental risks; they also seek

being jointly developed by diverse areas of the company,

to consolidate the company’s leadership position in the

prioritizing the most relevant environmental commitments.

This is an internal mechanism that ensures compliance of

energy market. Human resource and environmental pro-

tection, the struggle against climate change and sustain-

able economic growth are all strategic factors considered

during the planification, implementation and development

of Enel Chile’s activities.

Waste Management

One of the company’s goals by 2018 was to “Reduce the

annual generation of waste by 5%, quantified in its final dis-

Among the environmental processes and policies imple-

position.”

mented during 2018, we highlight:

The following actions were taken to achieve this goal:

•

Enel Green Power SpA’s Quality, Safety and Environ-

mental Policy, September 4, 2017.

•

Pilot Recycling Stations: Installed recycling stations in

the Pehuenche and Rapel power plants.

•

Policy 292, 1st Version: “Risk Evaluation and Environ-

mental Impact/Aspect Methodology”, October 23,

2017

• Waste Recovery: During 2018, a contract was signed

to sell non-hazardous waste from the Maule, Laja and

Biobio hydroelectric power plants.

• Organizational Procedure 545 Version: “Waste Man-

agement”, February 9, 2018.

•

Policy 106 Version 3: “Environmental incident classifi-

cation, communication, analysis, and report”, July 10,

2018

• Waste Baseline: During 2018, the waste quantification

registry was updated (Hazardous - Non-Hazardous and

Domestic) in renewable power plants.

•

Power plants waste management enforcement and ap-

propriate waste segregation practices.

•

Stop Works Policy, which, during 2018, expanded their

scope of action from health and safety to archaeology

and environment.

•

"International Recycling Day" diffusion and commemora-

tion with speeches and video transmissions.

During 2018, several actions were taken to safeguard and

optimize environmental management, some of which are

•

Reusable bags were given to company collaborators to

encourage their use and reduce the use of plastic bags.

highlighted in the following section.

134

Annual Report Enel Chile 2018Environmental
Disputes and
Sanctioning Process

•

The Resolution that approves the "Compliance Pro-

gram" was published December 31, 2018. Therefore,

during 2019 the company will work towards fulfilling

this Program.

In August 2018, the SMA presented two charges against

the company associated to the Renaico wind farm and the

Cerro Pabellón geothermal power plant.

Cerro Pabellón Geothermal
Power Plant:

Renaico Wind Farm:

• On August 6, 2018, the SMA issued Exempt Resolu-

tion N°1/ Rol D-076-2018, filing charges against Enel

Green Power South SpA.

•

In September 2018, the company submitted a "Com-

pliance Program" to the SMA, in response to the

charges filed against the Renaico Project.

•

In November 2018, the SMA gave the company feed-

back regarding the "Compliance Program" presented.

•

In December 2018, Enel answers the feedback re-

ceived from authorities regarding the "Compliance

Program".

• On August 9, 2018, the SMA issued Exempt Resolu-

tion N°1/ Rol A-002-2018, filing charges against the

North Geothermal Plant S.A.

• On September 2018, the company presented a "Com-

pliance Program" to the SMA, in response to the

charges filed in August.

• On December 13, 2018, the SMA issued a resolution

rejecting the "Compliance Program" proposed by Enel.

• On December 17, 2018, Enel presented an appeal for

reversal, which was received by the authority. The

company will be presenting its defense during 2019.

135

Environment and SustainabilityWind and Photovoltaic
(Solar) Plant Monitoring

To comply with Environmental Commitment Resolutions

•

Improvement of the Drinking Water System: Execu-

tion of projects to improve the drinking water system

for the Ayin Mapu indigenous community, relocated

because of the construction of the Ralco Power Plant.

The project benefits 85 indigenous families.

(RCA in its Spanish acronym) and mitigate potential envi-

•

Alto Bíobío Housing Program: Establishment of an

ronmental impact, Enel Chile monitors the environment.

Environment monitoring is performed with the purpose of

getting to know the state of an environmental aspect that

agreement with the Alto Bíobío Municipality and con-

struction of homes for indigenous families relocated

because of the construction of the Ralco Power Plant.

The project benefits 54 Indigenous families in the dis-

allows us to know its specific condition.

trict.

During 2018, Bird Wildlife was monitored (Affected Avifau-

na Monitoring Program- Avifauna Monitoring, Bird Census-

monitoring the bandurria patterns) Flora was monitored;

Fauna was monitored (Contingency plan for wildlife- mon-

itoring reptiles); Archeological Sites were monitored (Ar-

chaeological Follow-up Plan); Vegetation propagation was

monitored; Archaeological monitoring at Wind Farms; wind

farm noise was monitored and mitigated.

Compliance with
Environmental
Commitment
Resolutions (RCA)

Well Water and Oil
Recovery System

In the Sauzal, Sauzalito, Rapel, Cipreses and Isla hydroelec-

tric power plants, an oil skimmer system to recover oil from

wells are in place, extracting oil that has drained from the

units to the drainage ditch. This initiative seeks to minimize

the potential impact of contamination to waters under the

dam produced by oil leakages and filtrations.

Round tables
and studies

During 2018, the following environmental management ef-

The actions taken during 2018 related to the Ralco Power

forts are highlighted:

Plant to comply with the RCA of renewable power plants

are highlighted below:

•

Completion of the "Environmental Flow Pilot Project"

study in the Maule and Laja rivers.

•

Reforestation agreement with Universidad de Con-

cepción: 422 reforested hectares in the Lonquimay

•

Incorporation of the RECOGE plan from MMA to the

area.

•

Restorations: Completion of the restauration efforts

of landfill and deposit sites used during the construc-

tion of Ralco Power Plant.

multidisciplinary round table for the Huemul Conser-

vation Program in the VIII Region.

136

Annual Report Enel Chile 2018Compliance with the
Thermoelectric Power
Plant Emissions
Standard

In terms of complying with the demands established by the

Green Taxes

In April 2018, the thermoelectric power plants reported

their emissions according to the emissions quantification

method presented and authorized by the SMA to determine

green tax payments. A total tax of Ch$ 16,437,440,924

was paid, which considers the atmospheric emissions

from the Enel Generación Chile thermal park and its

D.S. 13/11 Thermoelectric Power Plant Emissions Standard,

GasAtacama S.A. subsidiary.

during 2018, Enel Generación Chile's thermal park and its

GasAtacama subsidiary carried out several improvements

to the Continuous Emissions Monitoring System (CEMS),

such as changing the data acquisition systems (DAHS) of

the thermal plants and the installation of CEMS to monitor

thermal energy flow, installing flow CEMS in the Taltal, San

Isidro and Quintero thermoelectric power plants.

During 2018, the Environmental Superintendence (SMA)

published the verification reports of compliance with the

established limits according to the decree, based on the

emissions figures in the quarterly reports that each power

plant uploaded to the "Thermoelectric Power Plant" website

of such Superintendence. The SMA verified that the emis-

sions from all the company's electric generation units (UGE)

complied with the established limit.

New Projects

On February 14, 2018, the Environmental Impact Declara-

tion (DIA in its Spanish acronym) "San Isidro Power Plant

Water Supply and Liquid Waste Disposition Optimization

System" was approved by the Antofagasta Region Assess-

ment Committee, through the Exempt Resolution N° 016.

On May 25, 2018, the Environmental Assessment Service

(SEA) of the Antofagasta Region issued Exempt Resolu-

tion 0106, indicating that the "Bess Energy Storage System

in the Taltal Thermoelectric Power Plant" project is not re-

quired to comply with the SEIA in order to begin construc-

tion.

137

Environment and Sustainability
Sustainability

Sustainable
business model

Enel Chile´s sustainable business model seeks to focus the

business itself on sustainability.

The Company has played a leading role in the country´s

energy transition by having more than 1 GW of non-con-

ventional renewable installed capacity; by promoting elec-

tric mobility; bringing in 100 electric buses through a pri-

vate-public partnership; by promoting electric heating; and

by installing almost 300,000 intelligent meters for custom-

ers to manage their consumption.

This is how Enel Chile intends to have an active role in the

sustainable development of Chile. The 2018 sustainability

plan focuses on 4 strategic guidelines:

•

Innovation and asset optimization

•

Growth in low carbon products and services

•

Inclusion of local communities

•

Inclusion of the people we work with

In 2018, the milestones of each one of these guidelines

involve the investment in digitalization, adding flexibility

to the Company´s generation mix, prioritizing renewables

and also installing the second dome on the coal field of

the Bocamina thermal plant, which today is recognized as

a power plant with high environmental standards in the

region.

Regarding growth in low carbon services and technology,

the leadership position of Enel Green Power as the number

1 renewable operator with 1 GW installed capacity is worth

highlighting. Enel X invests in decontaminating cities, play-

ing a leadership role in electric mobility by providing 100

buses for Santiago, and replacing more than 2,500 tradi-

tional heaters with electric ones.

With respect to the work with local communities, Enel

Chile has employees dedicated to community relations,

maintaining a fluent dialog with more than 100 commu-

nities, and building and managing long-term agreements

with each one of them.

In terms of the last strategic guideline, our accomplish-

ments are achieved with the daily effort of individuals that

are considered the focal point of our strategy. We build

challenging routes with these individuals to move towards

inclusion and destroying physical and cultural barriers to di-

versity. Facilitating the conciliation of work and family life

is also part of this goal. In 2018, 16% of Enel Chile collab-

orators have become part of the Smart Working and Work

Flexibility program.

The 2018 and the 2019 plan are based on prioritizing health

and occupational safety, solid corporate governance, en-

vironmental sustainability, a sustainable supply chain, and

the long-term creation of economic value for the sustain-

able development of our business.

138

Annual Report Enel Chile 2018Stakeholders and
materiality

Compliance system
and complaint channel

The Company has focused its sustainability management

Enel Chile has implemented a Penal Risk Prevention Model

on inclusion and transparent collaboration with its stake-

that builds on the Ethics Code and the Zero Corruption

holders. Enel Chile is working on criteria and principles to

Tolerance policy. Enel Chile opposes to any form of

achieve a fair relationship with all stakeholders, to involve

corruption, direct or indirect, within any process of the value

them from the beginning of the design stage of a project,

chain, any business location and with any stakeholder.

assuring equal conditions and equal access to information

required for the decision making process. This is performed

This model is based on the Global Compliance Program of

by identifying the most relevant stakeholders involved in

the Enel Group, which is comprised of a series of specific

each operation and evaluating potential areas of impact and

programs that respond to local legislation and the highest

joint opportunities.

international standards, such as, ISO 37,001, the Foreign

Corrupt Practices Act FCPA (U.S.A) and the Bribery Act

The Enel Group participates in Chile promoting private-pub-

(United Kingdom). The Group has also incorporated the

lic actions to proactively contribute to improve private com-

definitions of the Global Compact and the Sustainable De-

pany compliance and behavioral standards to strengthen

velopment Objectives, both developed by the United Na-

a culture inspired in transparency, honesty, and long-term

tions.

sustainable relationships. Within this context, an agree-

ment was formalized with Chile Transparente to strengthen

The Penal Risk Prevention Model covers all the requirements

and include actions into the Company´s compliance sys-

of the Crime Prevention Model defined by Law 20,393.

tem.

The objective of the Compliance System is to contribute to

Enel’s development of a long-term relationship of trust with

Local needs are directly related to the Company´s goals in

its stakeholders, implementing activities in a responsible

materiality matrices that are developed for each territory

manner and communicating them transparently. The focus

to carry out the projects that are adequate to reach shared

on the creation of shared value allows collaborating with the

goals and priorities.

local industry in defining a common standard to comply with

and aligned to international best practices.

The significant presence of the company in the territory

allows having a constant view of the opportunities and

This system has been conceived as the focal point of the

instances available to align solutions and add value to all

company´s operations and is therefore a guideline on be-

stakeholders. These opportunities have fostered the de-

havior for all company employees. The Board of Directors

velopment of circular economy solutions, i.e., the trans-

approves the programs of the compliance system and, with

formation of waste, such as, pallets into community eco

the support of the Head of Crime Prevention, implements

construction material.

the programs. The Head of Crime Prevention has the or-

ganizational authority and resources to carry out his duties

Enel Chile´s business culture is guided by the Open Power

adequately. The Board of Directors periodically evaluates

Vision, committed to the United Nations Sustainable De-

and monitors the implementation and Improvement of the

velopment Objectives, the creation of shared value and

Company´s programs.

complying with the company´s Human Rights Policy.

Suppliers and contractors’ employees adhere to the

provisions of these programs by means of the general

contracting conditions, a set of clauses that stress the im-

portance and facilitate the control and proper implementa-

139

Environment and Sustainabilitytion of the compliance system specified in Law 20,393 ap-

plicable to Enel Chile and all its subsidiaries. Enel Chile and

each subsidiary has its own specific compliance system.

If a potential or real action that opposes the principles of the

Penal Risk Prevention Model were to take place, any stake-

holder may present a complaint through the Complaints

Channel managed by the Internal Audit Department. This

channel has specific management procedures that guaran-

tee confidentiality and no retaliation to the complainant.

This channel is managed with an external platform that

uses industry standards in terms of confidentiality and is

Sustainable
development objectives

In 2015, the United Nations adopted the new Sustainable

Development Objectives (ODS in its Spanish acronym).

This initiative invites companies to use creativity and inno-

vation to face sustainable development challenges, such

as poverty, gender equality, access to clean water and en-

ergy, and climate change among others. At the time, Enel

SpA (“Enel”) announced the Group’s commitment to con-

tribute to achieving four of the 17 objectives. Particularly,

Enel and its companies worldwide have focused on the

accessible through the internet, telephone or in writing.

following objectives:

Open Power Vision

Enel Generación Chile has identified the “Open” con-

1. Quality education (ODS
4):

cept as the focal point of its business, a cornerstone of

In 2018, Enel Chile contributed with scholarships and sup-

its strategy and operations. The idea is to Open energy to

plementary education for more than 13,500 youngsters, in

more people; Open energy to new technologies; offer peo-

addition to the 25,000 students that received benefits up

ple new ways to manage energy; add new uses to energy;

to 2017.

and add more contributors to energy.

140

Annual Report Enel Chile 20182. Affordable energy (ODS 7):

Enel Chile is committed to promoting affordable and sus-

tainable energy for the neighboring communities to its

facilities. The Company´s goal for 2020 is to add 70,000

beneficiaries to the ones existing in 2016. In 2018, rough-

ly 29,000 beneficiaries were added to the 141,000 exist-

ing ones. From 2015-2018, there have been more than

170,000 beneficiaries, nearly 6% of the goal set in the

Human Rights Policy

The Company approved its Human Rights Policy in 2013.

It represents Enel Chile’s commitment and responsibility

towards this critical aspect of social and corporate sus-

tainability. The document sets out the Company’s com-

mitment to all human rights, particularly those that affect

corporations and the activities carried out by all Company

2018-2020 plan.

employees in Chile.

Within this framework, the company performed a Human

Rights diagnosis (Due Diligence) in Chile to identify situa-

tions at risk and prevent them. The results of the diagnosis

were disclosed to the stakeholders. This process contin-

ues to be constantly monitored and specific plans are im-

plemented to minimize related risks.

In 2018, the company implemented significant improve-

ments to mitigate the risks detected through due diligences

performed in the territories in which it has electricity as-

sets.

3. Decent job and
economic growth (ODS 8):

Promote sustainable, inclusive job opportunities and eco-

nomic growth for 500,000 people. Enel Chile expects to

add 150,000 people to the beneficiaries existing in 2016

by 2020. During 2018, nearly 30,700 have had access to

local economic development by forming small and medi-

um sized companies or participating in training programs.

Enel Chile has contributed with approximately 12% of the

Group´s goal in 2018-2020 plan regarding this objective,

reaching a total 361,500 beneficiaries during the 2015-

2018 period.

4. Action for the climate
(ODS 13):

Adopt initiatives to fight climate change in order to be car-

bon neutral by 2050. The goal is to reduce CO2 (g/kWh)
emissions. Enel Green Power Chile has made significant

investments in this area and is getting closer to accomplish

its objective.

141

Environment and Sustainability142

Annual Report Enel Chile 201820

Ownership share
table

143

Letter from the Chairman 144

Annual Report Enel Chile 2018Direct and Indirect
Ownership Shares

Company

Enel Generación Chile

Pehuenche

Aysén Energía

Aysén Transmisión

Enel Distribución Chile

Transquillota

GasAtacama Chile

GNL Chile

EE Colina

Luz Andes

Empresa de Transmisión Chena S.A.

Cameros

Gasoducto Atacama Argentina

Enel Green Power Chile Ltda.*

Empresa Eléctrica Panguipulli S.A.*

Diego de Almagro Matriz SpA*

Parque Eólico Tal Tal S.A.*

Geotérmica del Norte S.A.*

Empresa Nacional de Geotermia S.A.*

Parque Eólico Valle de los Vientos S.A.*

Parque Talinay Oriente S.A.*

Almeyda Solar SpA*

Enel Green Power del Sur SpA*

Enel X Chile Spa

Energía Marina

*shareholdings added to Enel Chile on April 2, 2018

Gx: Generation
Dx: Distribution
Tx: Transmission/Commercialization
Ox: Gas pipeline, others

Business

Ownership

93.55%

92.65%

51.00%

99.09%

50.00%

100.00%

33.33%

100.00%

57.50%

100.00%

99.99%

100.00%

84.59%

51.00%

99.99%

61.37%

100.00%

25.00%

Ownership share table

145

Organization structure

ENEL CHILE S.A.

99.99109%

ENEL Green
Power Chile Ltda.

99.090782%

59.98%

57.50%

93.548092%

ENEL X Chile SpA

Sociedad Agrícola

de Cameros Ltda.

ENEL Generación

Chile S.A.

0.01%

Parque Eólico Valle
de los Vientos S.A.

99.99%

84.59%

Geotérmica del
Norte S.A.

0.01%

Parque Eólico
Taltal S.A.

99.99%

51%

Empresa Nacional
de Geotermia S.A.

0.045%

Empresa Eléctrica
Panguipulli S.A.

99.955%

61.37%

Parque Eólico
Talinay Oriente S.A.

100%

Diego de Almagro
Matriz SpA

25%

Energía Marina
SpA

0.00034%

Enel Green Power
del Sur SpA

99.99995%

100%

Almeyda
Solar SpA

100%

99.999%

0.001%

100%

Parronal SpA

Parque Solar
Maipú SpA

ABC Solar
Dos SpA

ABC Solar
10 SpA

MSN Solar
Tres SpA

146

ENEL

Distribución

Chile S.A.

0.10%

99.90%

Luz

Andes Ltda.

99.9998%

99.90%

0.0002%

Empresa

Eléctrica de

Colina Ltda.

0.10%

Empresa de

Transmisión

Chena S.A.

92.65%

Pehuenche S.A.

GNL

Chile S.A.

33.33%

97.3701%

2.6299%

GasAtacama

Chile S.A.

Aysén

Transmisión S.A.

51%

0.03%

Gasoducto

Atacama

Argentina S.A.

99.97%

50.00%

Transquillota

Ltda.

100%

0.079318%

Aysén

Energía S.A.

51%

Gasoducto

Atacama

Argentina S.A.

Argentine Branch

ENEL

Argentina S.A.

99.00%

Ingendesa do

Brasil Ltda.

Annual Report Enel Chile 2018ENEL CHILE S.A.

99.99109%

ENEL Green

Power Chile Ltda.

99.090782%

59.98%

57.50%

93.548092%

ENEL
Distribución
Chile S.A.

ENEL X Chile SpA

Sociedad Agrícola
de Cameros Ltda.

ENEL Generación
Chile S.A.

0.01%

Parque Eólico Valle

99.99%

84.59%

Geotérmica del

de los Vientos S.A.

Norte S.A.

0.01%

Parque Eólico

99.99%

Taltal S.A.

51%

Empresa Nacional

de Geotermia S.A.

0.045%

Empresa Eléctrica

99.955%

Panguipulli S.A.

61.37%

Parque Eólico

Talinay Oriente S.A.

100%

Diego de Almagro

Matriz SpA

25%

Energía Marina

SpA

0.00034%

Enel Green Power

99.99995%

100%

del Sur SpA

Almeyda

Solar SpA

100%

99.999%

0.001%

100%

Parronal SpA

Parque Solar

Maipú SpA

ABC Solar

Dos SpA

ABC Solar

10 SpA

MSN Solar

Tres SpA

0.10%

99.90%

Luz
Andes Ltda.

99.9998%

99.90%

0.0002%

Empresa
Eléctrica de
Colina Ltda.

0.10%

Empresa de
Transmisión
Chena S.A.

92.65%

Pehuenche S.A.

GNL
Chile S.A.

33.33%

97.3701%

2.6299%

GasAtacama
Chile S.A.

Aysén
Transmisión S.A.

51%

0.03%

Gasoducto
Atacama
Argentina S.A.

99.97%

50.00%

Transquillota
Ltda.

100%

0.079318%

Aysén
Energía S.A.

51%

Gasoducto
Atacama
Argentina S.A.
Argentine Branch

ENEL
Argentina S.A.

99.00%

Ingendesa do
Brasil Ltda.

Schematic Table

147

148

Annual Report Enel Chile 201821

Company’s
significant events

149

Letter from the Chairman Consolidated Significant
Events

In accordance with Articles 9 and 10, section 2, of the Se-

mon shares with voting rights, and that as a result of

curities Market Law 18,045 and as established under Gen-

the exercise of such withdrawal rights, as of the date

eral Norm N° 30 of such Superintendence, the following

of expiration of the dissenting shareholders’ with-

significant events were informed:

drawal rights, no shareholder exceeds the 65% maxi-

Enel Chile S.A.

• On January 22, 2018, it was informed as a significant

event that Enel Chile S.A. (hereafter “Enel Chile” or

the “Company”) on January 19, 2018, the legal peri-

od for dissenting shareholders to exercise their with-

drawal rights arising from the merger agreement of

Enel Green Power Latin America S.A. into the Com-

pany (the “Merger”) approved at the Extraordinary

Shareholders’ Meeting held on December 20, 2017

(the “Meeting”) has expired.

During such period and based on the information

available as of this date, the shareholders that all to-

gether represent a total of 1,024,251,979 common

shares of the Company, or 2.09% exercised their

withdrawal rights. According to the relevant legal pro-

visions and regulations and particularly Official Letter

No 32,435 issued by the Financial Markey Commis-

sion (former Superintendence of Securities and Insur-

ance) dated November 7, 2017, the price of the shares

of the shareholders that exercised their withdrawal

rights will be paid by the Company as of the date the

Merger is effective pursuant to the terms and condi-

tions agreed upon by the Meeting. The Company will

opportunely inform on the aforementioned through a

significant event.

Consequently, one of the conditions precedent to the

Merger has been satisfied, i.e., that the Enel Chile

shareholders that exercise their withdrawal rights do

not represent more than 5% of the Company’s com-

mum shareholding concentration limit established by

the Enel Chile bylaws. This percentage is to be cal-

culated considering the number of shares in which

will be divided the new equity of Enel Chile, to be ap-

proved as part of the Merger and the capital increase

that is required to have sufficient shares to deliver to

Enel Generación shareholders within the context of

the Enel Generación Tender Offer.

• On February 8, 2018, it was informed as a significant

event that, with regard to the Reorganization process

approved by the extraordinary shareholders’ agree-

ment held on December 20, 2017 (the “Meeting”):

The Company will commence the preemptive

rights subscription period, both in Chile and in the

United States of America, of the 10,000,000,000

new common shares issuance financed with the

Ch$8 20,000,000,000 capital increase approved

by the Meeting on February 15, 2018. The no-

tice of the preemptive rights to subscribe these

shares, which sets the beginning of the preemp-

tive rights subscription period will be published

in the El Mercurio de Santiago newspaper on

the previously mentioned date. Pursuant to

the ESM’s agreement and the terms and con-

ditions of the Reorganization, the shares that

remain available once the preemptive rights sub-

scription period has ended will be allocated to

the shareholders of Enel Generación Chile S.A.

(“Enel Generación”) that tender their shares in

the Enel Generación Offer of Shares (the “Enel

Generación TO”), if it is declared successful, as

required by its terms and conditions.

150

Annual Report Enel Chile 2018

The effectiveness of this Capital Increase is sub-

In compliance with Article 212 of the Securities

ject to the conditions precedent approved by

Market Law N° 18,045, Enel Chile published

the Meeting. In accordance with such approved

in “El Mercurio de Santiago” and “La Tercera”

conditions, the share subscription contract of

newspapers on March, 25 2018, the Notice in-

the shareholders or third parties that decide to

forming on the outcome of its offer to purchase

exercise their preemptive subscription rights

up to the total amount of shares issued by Enel

during the preemptive rights subscription period

Generación Chile S.A. (“Enel Generación”) not

will be conferred on the first business day of the

already held by Enel Chile, that is, 3,282,265,786

month following the date in which the Company

shares issued by Enel Generación (“Enel Gener-

publishes the results notice declaring the Enel

ación PTO”) equivalent to 40.02% of such com-

Generación PTO successful as determined by

pany´s common stock, declaring that such offer

article 212 of the Securities Market Law. The

has been successful according to its terms and

subscribers must pay for their shares on the

conditions. A copy of the published notice is at-

respective contract subscription date, the same

tached to this disclosure.

date in which the subscription contracts become

effective and the shares are delivered to the

Pursuant to the Enel Generación PTO, Enel Chile

subscribers.

has purchased, on its own behalf, 2,753,096,167

shares issued by Enel Generación (including

2. The Company will commence the Enel Generación

the shares represented by American Deposi-

PTO, both in Chile and in the United States

tary Shares (“ADS”) purchased through a Public

of America, to purchase all Enel Generación

Tender Offer carried out in the United States of

shares that are not owned by Enel Chile and that

America), equivalent to 33.6% common shares

represent 40.02% of all shares that represent the

issued by Enel Generación. As a result, Enel Chile

equity of Enel Generacion. As stated by Law, the

has become the owner of a total 7,672,584,961

terms and conditions of the Enel Generación PTO

shares issued by Enel Generación (including the

will be detailed in the tender commencement no-

shares represented by the ADSs purchased),

tice and prospectus.

reaching a total 93.55% shareholding of Enel

Generación’s subscribed and paid in capital.

The Enel Generación PTO commencement notice

will be published in two local newspapers, both

Therefore, Enel Chile declares having satisfied

on February 15, 2018. The Enel Generación PTO

each and every one of the conditions of every

will be conducted for a 30-calendar day period to

stage of the Reorganization approved by the

begin on February 16, 2018. Notwithstanding the

Meeting, and, thus, declares the capital increase

above mentioned, the Company will extend this

of Enel Chile approved by the Meeting, not ful-

time frame in five calendar days, reaching a total

filled, as a resolutory condition.

35 calendar day term, in accordance with the Se-

curities Market Law 18,045, and finally conclude

Consequently, every stage of the Reorganization

on March 22, 2018.

will cause effect on each respective date stated

• On March 25, 2018, it was informed as a significant

below:

event that, with regard to the Reorganization process

(a) Merger: The merger by incorporation of Enel Green

approved by the extraordinary shareholders’ agree-

Power Latin America S.A (“Enel Green Power”) by

ment held on December 20, 2017 (the “Meeting” ),:

Enel Chile (the “Merger”) will cause effect on Abril

151

Significant Events

2, 2018, that is, the first working day of the month

2. Finally, and in accordance with the Ordinary Of-

following Enel Chile’s published Notice on the out-

fice No. 32,435 issued by the Superintendency

come, pursuant to Article 212 of the Securities

of Securities and Insurance, today the Financial

Market law declaring the Enel Generación PTO a

Market Commission, dated November 7,2017,

success. On that date, Enel Chile will acquire all as-

the share price of the shareholders dissidents

sets and liabilities, capital and shareholders of Enel

who exercised their right to withdraw of Enel

Green Power and will succeed it in all its rights and

Chile as a result of the approval of the Merger,

obligations resulting in its full dissolution.

will be paid by Enel Chile from the date on which

the Merger is effective in accordance with the

(b) Capital Increase of Enel Chile: The resolutory con-

terms and conditions agreed at the Shareholders'

dition applicable to Enel Chile’s capital increase ap-

Meeting, that is, since April 2, 2018 with their

proved by the Meeting with the purpose, among

corresponding readjustments and interests.

others, to issue sufficient shares to be delivered

to the shareholders of Enel Generación as part

• On March 28, 2018, it was informed as a signifi-

of Enel Generación PTO if it were not success-

cant event that on March 27 and 28, 2018, a group

ful. Based on the above mentioned, as of April

of Banks have disbursed, in favor of Enel Chile, Ch $

2, 2018, the shareholders or third parties that

517,680,625,000 and US$ 697,500,000, each respec-

exercised their pre-emptive subscription rights

tive date, in favor of Enel Chile, in accordance with a

during the pre-emptive rights period, which ended

"Senior Unsecured Term Loan Credit Agreement", to

March 16, 2018, may grant the respective share

finance the cash needs arising from the corporate re-

subscription contract and proceed to pay for such

organization transaction called "Project Elqui” known

subscribed shares.

by the market.

•

At the Enel Chile´s Ordinary Shareholders Meeting

the Securities Market Law N° 18,045, the date of

held April 25, 2018, the new Board of Directors of the

the company’s shareholder’s acceptance of the

Company was elected for a three-year period with the

Enel Generación PTO and the formalization of the

following individuals:

shares sold as part of the Enel Generación PTO

is the date of the Notice of the outcome of the

1.- Mr. Herman Chadwick Piñera

PTO. However, the payment of the price of the

2.- Mr. Giulio Fasio

Enel Generación PTO and the subscription of Enel

3.- Mr. Salvatore Bernabei

Chile’s common stock will be carried out on April

4.- Mr. Daniele Caprini

2, 2018, according to the terms and conditions de-

5.- Mr. Fernán Gazmuri Plaza

scribed in the Enel Generación PTO prospect.

6.- Mr. Pablo Cabrera Gaete

7.- Mr. Gerardo Jofré Miranda

(d) Amendment to Enel Generación Bylaws: The

amendment to the Enel Generación bylaws ap-

•

At the Board meeting held April 25, 2018, the Board

proved by the company’s Extraordinary Share-

of Directors agreed to appoint Mr. Herman Chadwick

holder’s Meeting held on December 20, 2017,

Piñera as Chairman of the Board of Directors and Mr.

became effective on March 25, 2018, date in

Domingo Valdés Prieto as the Secretary of the Board

which the Notice of the outcome as required by

of Directors.

Article 212 of the Securities Market Law declares

the Enel Generación PTO a success.

152

Annual Report Enel Chile 2018

•

Also, at the aforementioned meeting, the Board of

•

The aforementioned, at the date of the referred Sig-

directors proceeded to appoint the Directors Commit-

nificant Event, were still pending the subscription and

tee, in accordance to the Corporations Law N° 18,046

payment of certain shares corresponding to share-

and the Sarbanes Oxley Act, electing Fernán Gazmuri

holders or third parties who decided to exercise their

Plaza, Pablo Cabrera Gaete and Gerardo Jofré Miran-

preemptive subscription rights during the 30 day pre-

da. In accordance with the provisions of Circular N°

emptive subscription period from February 15, 2018

1,956 of the Superintendence of Securities and Insur-

to March 16, 2018; and there were some sharehold-

ance, it was duly informed that the aforementioned

ers who, despite having exercised their withdrawal

members of the Directors Committee are indepen-

right, to that date, had not claimed the corresponding

dent directors.

price.

•

The Board meeting appointed Mr. Fernán Gazmuri

• On June 7, 2018, in accordance with articles 9 and

Plaza as the Financial Expert of Enel Chile´s Direc-

10, paragraph 2, under the Securities Market Law

tors´ Committee and the Directors´ Committee of the

N°18,045, duly authorized, I hereby inform you of the

Company appointed Mr. Fernán Gazmuri Plaza as the

following significant event, that today, June 07, 2018,

Chairman and Mr. Domingo Valdés Prieto as Secre-

Enel Chile S.A. has issued bonds pursuant to the

tary of the Directors Committee.

Form F-3 Registration Statement of the Securities Act

of 1933 of the United States of America, submitted

•

At the ordinary shareholders meeting held April 25,

to the U.S. Securities and Exchange Commission on

2018, it was agreed to distribute a minimum manda-

May 30, 2018. The above-mentioned bond issuance

tory dividend (from which the interim dividend paid in

is described in the form referred to in circular letter

January 2018 is deducted) and an additional dividend

1,072 of this Financial Market Commission, which is

totalizing Ch$192,160,453,281.

attached to this letter.

•

Given that the above-mentioned interim dividend

• On September 27, 2018, in accordance with articles 9

has already been paid, the distribution and payment

and 10, second subparagraph, of the Securities Mar-

of the remnant of the final dividend shall amount to

ket Law N° 18,045, and duly authorized, I hereby in-

Ch$155,025,509,218.

form as a significant event that in the ordinary session

of the Board of Directors held today, the Chief Execu-

•

The extraordinary shareholders´ meeting held May

tive Officer of the Company, Mr. Nicola Cotugno, has

14, 2018, informed having agreed to distribute the

submitted his resignation. He will remain in his posi-

minimum mandatory dividend (from which the inter-

tion until September 30, 2018, and then will take on

im dividend paid in January 2018 is deducted) and an

new tasks within the Enel Group.

additional dividend totalizing Ch$192,160,453,281. It

was also said that given that the above-mentioned in-

In addition, in the same Board meeting of Enel Chile

terim dividend has already been paid, the distribution

S.A. Board of Directors appointed Mr. Paolo Pallotti as

and payment of the remnant of the final dividend shall

the new Chief Executive Officer of the Company and

amount to Ch$155,025,509,218.

will assume this position as of October 1, 2018.

•

The supplementary information is that, after deduct-

• On November 29, 2018, in accordance with articles 9

ing the interim dividend paid in January 2018, the re-

and 10, second subparagraph, of the Securities Mar-

maining definitive dividend that will be distributed and

ket Law N° 18,045, and as established under General

paid amounts to $2.24134 per share, calculated based

Norm N°30 of the Financial Market Commission, and

on the total of shares subscribed by midnight on May

duly authorized, I hereby inform as a significant event

12, 2018. As already informed, this dividend will be

that the Board of Directors of Enel Chile in its ses-

paid as of May 18, 2018.

sion held today, has approved the Strategic Plan of the

Company for the 2019-2021 period.

153

Significant Events

•

The macro elements included in the Strategic Plan for

and duly authorized, I hereby inform as a significant

the three-year period 2019-2021 have an estimated

event that Enel Chile S.A. (hereafter “Enel Chile” or

accumulated EBITDA of US$ 5,370 million and an es-

the “Company”), in the ordinary session held today

timated accumulated CAPEX of US$ 2,200 million.

the board of directors unanimously agreed the distri-

bution of an interim dividend of Ch$ 0.4523627013

•

Considering that the contents of the referred Strategic

per share attributable to the 2018 fiscal year to be paid

Plan follows and is based on projections and hypoth-

January 25, 2019, equivalent to 15% of Enel Chile’s

eses that might or might not come true in the future,

net income as of September 30, 2018, based on the

its effects cannot be established at this date.

Company’s Financial Statements at such date.

• On November 29, 2018, in accordance with articles 9

As set forth in the Commission´s Circular Letter No

and 10, second subparagraph, of the Securities Mar-

660 of 1986, we sent you Form No 1 that provides

ket Law N° 18,045, and as established under Gener-

information regarding the interim dividend.

al Norm N°30 of the Financial Market Commission,

154

Annual Report Enel Chile 2018

155

Significant Events156

Annual Report Enel Chile 201822

Identification
of subsidiaries
and associate
companies

157

Letter from the Chairman AGRÍCOLA DE CAMEROS

ENEL DISTRIBUCIÓN CHILE S.A.

ENEL GENERACIÓN CHILE

Name
Sociedad Agrícola de Cameros Limitada

Name
Enel Distribución Chile S.A.

Name
Enel Generación Chile S.A.

Type of Company
Limited Liability Company

Type of Company
Publicly held Limited Liability Stock Corporation

Taxpayer ID
77,047,280-6

Address
Camino Polpaico a Til-Til, S/N Til-Til, Chile

Telephone
(56 2) 2378 4700

Subscribed and Paid Capital (ThCh$)
5,738,046

Corporate Purpose
The purpose of the company is the exploitation
of agricultural land.

Core Business
Real estate and agriculture

Directors
Hugo Alvarez de Araya Sanhueza
Ingrid Morales Ävila
Manuel Larraín García
María Cristina Auad Faccuse
Cristián Guadi Imbarack Dagach

Alternate Directors
Fernando Morey Sampaio
Solange Zincke Cavalieri
Jose Hernández Flores
Jorge Geldres Reyes
Andrés Garib Auad

Senior Executives
Hugo Alvarez de Araya Sanhueza
Chief Executive Officer

Business Relations
Service contract provided by Enel Chile:
Provision of internal audit and compliance
control services. Price: expressed in UF per
hour that Enel Chile’s staff assigns to the
contracted services.

158

Taxpayer ID
96,800,570-7

Address
76 Santa Rosa St., 8th floor
Santiago, Chile

Telephone
(56 2) 2675 2000

Taxpayer ID
91,081,000-6

Address
76 Santa Rosa St.
Santiago, Chile

Telephone N°
(56 2) 2630 9000

Subscribed and Paid Capital (ThCh$)
230,137,980

Subscribed and Paid Capital (ThCh$)
552,777,321

Corporate Purpose
Distribution and sale of electricity, either
hydraulic, thermal or any other source of
electricity in Chile, as well as the distribution,
transportation, and sale of fuels of any kind,
and supplying this energy or fuel directly or
through other companies to as many customers
as possible.

Core Business
Electricity distribution.

Board of Directors
Rodolfo Avogadro Di Vigliano (Chairman)
Monica Hodor
Alessandra Billia
Hernán Felipe Errázuriz Correa

Senior Executives
Ramon Castañeda Ponce
Chief Executive Officer
Simone Tripepi
Andrés González Cerruti
Daniel Gómez Sagner
Horacio Aránguiz Pinto
Victor Tavera
Yanett Henríquez Zamora
Rodrigo Vargas Gómez

Business Relations
(I) Service contract provided by Enel Chile:
Comprehensive procurement service; Materials
purchasing; Contracting of works, services and
consultancies, Reception. Storage and supply
of recurrent and non-recurrent materials,
sales agent. Price: Mark-up over average price
of consumed materials. (ii) Service contract
provided by Enel Chile: Financial management,
management and corporative services. Price:
monthly amount fixed in UF. (iii) Trade accounts
receivable (iv) Administration services provided
by Enel Chile. Price: monthly amount fixed in
UF.

Corporate Purpose
Generation and supply of electricity; provision
of engineering and consulting services; and
construction and exploitation of infrastructure
projects in Chile and abroad.

Core Business
Electricity Generation

Board of Directors
Giuseppe Conti (Chairman)
Francesco Giorgianni
Hernan Cheyre Valenzuela
Frabrizio Barderi
Julio Pellegrini Vial
Antonio Scala
Cristiano Bussi
Luca Noviello

Senior Executives
Valter Moro
Chief Executive Officer
Raúl Arteaga Errázuriz
Luis Ignacio Quiñones Sotomayor
Bernardo Canales Fuenzalida
Humberto Espejo Paluz
Claudio Helfmann Soto
Luis Vergara Adamides
Michele Siciliano
Claudio Órdenes Tirado
Juan Alejandro Candia
Carlo Carvallo Artigas

Business Relations
(i)Service contract provided by Enel Chile:
Procurement services; Materials Purchasing;
Contracting of works, services and consultancies.
Price: Directly proportional to costs associated to
staff and to operating and maintenance expenses.
Every year, the amount for next annual period is
determined, introducing the proper improvements
and efficiencies. (ii) Service contract provided by
Enel Chile: Money desk and treasury services.
Price: Monthly amount expressed in UF.
(iii) Service contract provided by Enel Chile:
Accounting services. Price: Monthly amount
expressed in UF. (iv) Service contract provided
by Enel Chile: Internal audit and compliance
control services. Price: UF amount per hour that
Enel Chile staff dedicates to contracted services.
(v) Trade accounts receivable (vi) Administration
services provided by Enel Chile.

Annual Report Enel Chile 2018CHENA

GASATACAMA CHILE

GASODUCTO ATACAMA ARGENTINA

Name
Empresa de Transmisión Chena S.A

Name
GasAtacama Chile S.A.

Name
Gasoducto Atacama Argentina S.A.

Type of Company
Privately held corporation

Taxpayer ID
76,722,488-5

Address
76 Santa Rosa St. 8th floor
Santiago, Chile

Telephone N°
(562) 2353 4698

Subscribed and Paid Capital (ThCh$)
250,429

Corporate Purpose
Electricity transmission

Core Business
Electricity transmission

Board of Directors
Ramon Castañeda Ponce
Daniel Gómez Sagner
Francisco Messen Rebolledo

Senior Executives
Victor Hugo Balbontin Artus
Chief Executive Officer

Business Relations
(i) Network planning service contract provided
by Enel Distribución Chile: supervision and
remote operation, supervision, and coordination
of connections and disconnections, planning
and control of maintenance program, local
operations, maintenance and emergency
service, network planning, operations of
facilities. Price: monthly amount fixed in UF.
(ii) legal counsel service contract provided by
Enel Distribución Chile: topo management, legal
services, and secretary to the board. Price:
Monthly amount fixed in Chilean pesos.

Taxpayer ID
78,932,860-9

Taxpayer ID
78,952,420-3

Address
76 Santa Rosa St., Santiago, Chile

Address
76 Santa Rosa St, Santiago, Chile

Corporate Purpose
The company has the following purpose:
a) develop the generation, transmission,
purchase, distribution and commercialization
of electricity or energy of any other source; b)
purchase, extract, operate, process, distribute,
commercialize and sell solid, liquid and gas
fuels; c) sell and provide engineering services;
d) acquire, purchase, transfer, lease, charge and
develop, in any form, the concessions referred to
in the Electricity Law, maritime concessions and
water rights of any nature; e) transport natural
gas, by itself or jointly with third parties in Chile
or abroad, including the construction, location,
and operation of gas pipelines and other activities
directly or indirectly related to such operations; f)
catchment, extraction, treatment, desalination,
transportation, distribution, commercialization,
delivery and supply of seawater, in all its forms,
including natural, drinking, desalinized or treated
in any way, either by itself or through a third
party; g) invest in all types of assets, tangible
or intangible, movable or fixed; h) organize and
create all kinds of companies whose objectives
are related or linked to the energy industry in any
form, or that use electricity as the main input,
or that relate to any of the aforementioned
activities. To achieve its purpose, the company
may carry out all acts and enter into all contracts
that contribute to its business activities, including
the purchase, sale, acquisition or disposal, on
any account, of all kinds of assets, tangible or
intangible, movable or fixed and may enter into
whatever kind of existing companies or join in
their formation.

Core Business
Electricity generation and gas transportation

Subscribed and Paid Capital (ThCh$)
482,511,131

Directors
Raúl Arteaga Errázuriz (Chairman)
Sergio Ávila Arancibia
Carlo Cavallo
Pablo Arnés Poggi
Humberto Espejo Paluz

Senior Executives
Valter Moro
Chief Executive Officer

Business Relations with Enel Chile S.A.
C o m m u n i c a t i o n s , h u m a n r e s o u r c e
management, and capital management service
contract provided by Enel Chile S.A. Price:
monthly amount expressed in UF.

Corporate Purpose
The transportation of natural gas, either by
itself, through or jointly with a third party, in
the Chile or abroad, including the construction,
location and operation of gas pipelines and
other operations directly or indirectly related
to this objective. The company has incorporated
an agency in Argentina under the name of
Gasoducto Cuenca Noroeste Limitada Sucursal
Argentina whose purpose is the construction
of a gas pipeline between Cornejo, a town in
the province of Salta and the Argentina-Chile
border in the vicinity of Paso de Jama in Chile’s
Second Region.

Core Business
Gas transportation

Subscribed and Paid Capital (ThCh$)
126,309,044

Directors
Raúl Arteaga Errázuriz
Pablo Arnes Poggi
Alex Díaz Sanzana

Senior Executives
Valter Moro
Chief Executive Officer

Business Relations with Enel Chile S.A.
The company has no business relationships
with Enel Chile.

GNL CHILE

Name
GNL Chile S.A.

Type of Company
Privately held corporation

Taxpayer ID
76,418,940-K

Address
532 Rosario Norte St. office 1303, Las Condes,
Santiago, Chile

Telephone
(562) 2892 8000

Subscribed and Paid Capital (ThCh$)
1,860,332

159

Identification of Subsidiaries and Associate CompaniesCorporate Purpose
The purpose of the company is: a) contract
the services of GNL Quintero S.A., a liquefied
natural gas (“LNG”) regasification company,
and utilize its entire natural gas storage,
processing, regasification, and delivery capacity
and LNG available at its regasification terminal,
including its expansions, if any, and any other
matter stipulated in the contracts the company
might sign for the use of the regasification
terminal; b) import LNG from suppliers, as
determined by LNG purchase contracts; c) sell
and deliver natural gas and LNG, as determined
by the natural gas and LNG sales contracts
signed by the company with its customers;
d) manage and coordinate the schedules and
nominations of LNG shipments, as well as the
delivery of natural gas and LNG among various
customers; and e) fulfill all its obligations and
demand the enforcement of all its rights under
the previously identified contracts, coordinate
all operations under these contracts and, in
general, carry out any type of act or enter into
any contract that might be necessary, useful or
convenient in order to accomplish its purpose.

Core Business
Import and commercialization of natural gas

Directors
Juan Oliva Vásquez
Yasna Ross Romero
Luis Arancibia Yametti

Senior Executives
Alejandro Palma Rioseco
Chief Executive Officer

Business Relations
The company has no business relationships
with Enel Chile.

PEHUENCHE

Name
Empresa Eléctrica Pehuenche S.A.

Type of Company
Publicly held Limited Liability Stock Corporation,
registered in the SVS Corporations Registry
under number 293.

Taxpayer ID
96,504,980-0

Address
76 Santa Rosa St., Santiago, Chile

Corporate Purpose
Generate, transport, distribute and supply
electricity, and acquire and benefit from the
respective concessions.

Core Business
Electricity generation

Subscribed and Paid Capital (ThCh$)
175,774,920

160

Board of Directors
Raúl Arteaga Errázuriz
Luis Ignacio Quiñones Sotomayor
Paula Riveros Pérez
Fernando Vallejos Reyes
Juan Candia Narvaez

Senior Executives
Carlo Carvallo Artigas
Chief Executive Officer
Claudio Toledo Freitas
Vicente Villaseca Villalobos

Business Relations
C o m m u n i c a t i o n s , h u m a n r e s o u r c e
management, and capital management service
contract provided by Enel Chile S.A. Price:
monthly amount expressed in UF.

LUZ ANDES

Name
Luz Andes Limitada

Type of Company
Limited Liability Company

Taxpayer ID
96,800,460-3

Address
76 Santa Rosa St.
Santiago, Chile
Telephone N°
(56 2) 2634 6310

Subscribed and Paid Capital (ThCh$)
1,224

TRANSQUILLOTA

Name
Transmisora Eléctrica de Quillota Ltda.

Corporate Purpose
Distribution and sale of electricity, and sale of
household, sports, entertainment and computer
appliances.

Type of Company
Limited liability Company

Taxpayer ID
77,017,930-0

Address
Route 60, km 25, Lo Venecia, Quillota, V Region
of Valparaíso, Chile

Corporate Purpose
Transportation, distribution, and supply of
electricity, either by itself or through a third
party.

Core Business
Electricity transmission

Subscribed and Paid Capital (ThCh$)
4,404,446

Representatives
Pedro de la Sotta Sánchez (Enel)
Joint Manager ( Technical Support Chile)
Santiago Bradford Vicuña (Colbún)
Joint Manager
Goran Nanik(Colbún)
Joint Manager

Business Relations with Enel Chile S.A.
The company has no commercial relations with
Enel Chile.

Core Business
Electricity distribution

Joint Administration
Claudio Inzunza Díaz
Rodrigo Vicente Arévalo Cid

Senior Executives
Claudio Inzunza Díaz
Chief Executive Officer

Business Relations
(i) Service contract provided by Enel Chile:
Comprehensive procurement services,
materials purchasing, contracting works,
services and consultancies, reception, storage
and supply of recurrent and non-recurrent
materials, sales agent. Price: Mark-up over
average price of consumed materials. (ii)
Service contract provided by Enel Chile: Internal
audit and compliance control services. Price: UF
amount per hour that Enel Chile’ staff dedicates
to contracted services. (iii) Administration
service contract provided by Enel Chile.

EMPRESA ELÉCTRICA DE COLINA

Name
Empresa Eléctrica de Colina Ltda.

Type of Company
Limited Liability Company

Taxpayer ID
96,783,910-8

Address
31 Chacabuco St., Colina
Santiago, Chile

Telephone
(56 2) 2844 4280

Subscribed and Paid Capital (ThCh$)
82,222

Annual Report Enel Chile 2018Corporate Purpose
Distribution and sale of electricity, and sale of
household, sports, entertainment and computer
appliances.

Alternate Directors
Adrien Coudurier
José Manuel Astudillo Sepúlveda
Francesco Tutoli

Core Business
Electricity distribution

Joint Administration
Francisco Javier Evans Miranda
Rodrigo Vicente Arévalo Cid

Senior Executives
Francisco Javier Evans Miranda
Chief Executive Officer

ENEL GREEN POWER CHILE LTDA.

Name
Enel Green Power Chile Ltda.

Type of Company
Limited Liability Company

Taxpayer ID
96,920,110-0

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Senior Executives
Walter Moro
Chief Executive Officer

Business Relations
1. A contract with Enel Chile S.A. for treasury
or trade accounts management. The
transactions among both companies is
subject to an interest rate set at market
conditions.

2. A services contract with Energia y Servicios
South America SpA for legal services,
commercial services, management,
purchases, business innovation and
development.

3. A master services agreement with
Enel Generación Chile S.A. governing
the engineering services among both
companies related to electricity generation
and transmission projects.

4. Electricity supply contracts with Enel

Generación Chile S.A.

5. A contract to govern the different types of
guarantees granted by Enel Chile S.A. to
Enel Green Power Chile (comfort letters,
corporate guarantees and bank guarantees).
6. A general services contract with Enel Chile
S.A. to provide EGP Chile security, general
services, human resource, organizational
services, auditing, finance, communications,
legal, sustainability and other services
related to administration.

7. A services contract with Enel Generación
Chile S.A. to provide EGP Chile management
support services, regulatory analysis services,
and energy management services. Enel
Geen Power Chile also provides business
development services and operating and
maintenance services of Canela wind farm
to Enel Generación Chile S.A.

8. A trade account management contract with

Geotérmica del Norte S.A.

Subscribed and Paid Capital (US$)
842,086,413.75

ALMEYDA SOLAR SPA

Name
Almeyda Solar SpA.

Type of Company
Joint Stock Company

Taxpayer ID
76,321,458-3

Corporate Purpose
Investment in all types of assets related
to electricity generation, transmission, and
distribution as well as the installation, operation,
exploitation and administration of such assets.

Core Business
Investment in electricity generation and
transmission assets.

Administration
The bylaws include a Board of Directors

Board of Directors
Ali Shakhtur Said (Chairman)
Antonio Scala
James Lee Stancampiano

of solar energy or any other non-conventional
renewable energy source.

Core Business
Photovoltaic solar energy generation.

Administration
Performed by Board of directors, as stated by
bylaws.

Board of Directors
Ali Shakhtur Said (Chairman)
Roberto Alhucema
Juan Candia Narváez

Senior Executives
Walter Moro
Chief Executive Officer

Business Relations
1. A contract with Enel Chile S.A. for treasury
or trade accounts management. The
transactions among both companies is
subject to an interest rate set at market
conditions.

2. A contract to govern the different types of
guarantees granted by Enel Chile S.A. to
the company (comfort letters, corporate
guarantees and bank guarantees).

3. A general services contract with Enel Chile
S.A. to provide the company security,
general services, human resource,
organizational services, auditing, finance,
communications, legal, sustainability and
other services related to administration.
4. A services contract with Enel Generación
C h i l e S . A . t o p r o v i d e E G P C h i l e
management support services, regulatory
analysis services, and energy management
services.

5. A contract for technical support provided by

Enel Green Power SpA.

ENEL GREEN POWER DEL SUR SPA

Name
Enel Green Power del Sur SpA

Type of Company
Joint Stock Company

Taxpayer ID
76,412,562-2

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Subscribed and Paid Capital (US$)
3,500.000

Subscribed and Paid Capital (US$)
353,605,313

Corporate Purpose
Generation, distribution and commercialization
of wind energy or any other non-conventional
renewable energy source.

Corporate Purpose
Generation, distribution and commercialization

Core Business
NCRE powered electricity generation.

161

Identification of Subsidiaries and Associate CompaniesAdministration
The bylaws include a Board of Directors

Core Business
Electricity generation and distribution and
investment in generation

measurements, and other research projects
to identify geothermal resources.

Board of Directors
Ali Shakhtur Said (Chairman)
James Lee Stancampiano
Osvaldo Farías Luke

Alternate Directors
José Manuel Astudillo Sepúlveda
Juan Candia Narváez
Adrien Coudurier

Senior Executives
Walter Moro
Chief Executive Officer

Business Relations
1. A contract with Enel Chile S.A. for treasury
or trade accounts management. The
transactions among both companies is
subject to an interest rate set at market
conditions.

2. A contract to govern the different types of
guarantees granted by Enel Chile S.A. to
the company (comfort letters, corporate
guarantees and bank guarantees).

5. A contract for technical support provided by

Enel Green Power SpA.

EMPRESA ELECTRICA PANGUIPULLI
S.A.

Name
Empresa Eléctrica Panguipulli S.A.

Type of Company
Privately held corporation

Taxpayer ID
76,412,562-2

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Subscribed and Paid Capital (US$)
48,038,707.05

Corporate Purpose
Generation, supply, and distribution of
electricity; investment in electricity generation
and distribution companies and also the
purchase and sale, commercialization, import
and export of all types of products, machinery
and raw materials.

162

Administration
Performed by a Board of Directors, as stated
by the Corporations Law.

Board of Directors
Ali Shakhtur Said (Chairman)
James Lee Stancampiano
Jaime Toledo

Alternate Directors
José Manuel Astudillo Sepúlveda
Juan Candia Narváez
Adrien Coudurier

Senior Executives
Walter Moro
Chief Executive Officer

Business Relations
1. A contract with Enel Chile S.A. for treasury
or trade accounts management. The
transactions among both companies is subject
to an interest rate set at market conditions.
2. A contract to govern the different types of
guarantees granted by Enel Chile S.A. to
the company (comfort letters, corporate
guarantees and bank guarantees).

5. A contract for technical support provided by

Enel Green Power SpA.

E M P R E S A N A C I O N A L D E
GEOTERMIA S.A.
Name
Empresa Nacional de Geotermia S.A.

Type of Company
Privately held corporation

Taxpayer ID
99,577,350-3

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Core Business
Exploration of geothermal resources.

Administration
Performed by a Board of Directors, as stated
by the Corporations Law.

Board of Directors
Walter Moro
Ali Shakhtur Said
Rodrigo Lobos Roldán
Carlos Alberto Reyes Comandari

Alternate Directors
Liliana Schnaidt Hagedorn
Francesco Tutoli
Gonzalo Paredes Saieg

Senior Executives
Guido Cappetti
Chief Executive Officer

Business Relations
A contract with Enel Green Power Ltda. for
financial and accounting services.

GEOTERMICA DEL NORTE S.A.

Name
Geotérmica del Norte S.A.

Type of Company
Privately held corporation

Taxpayer ID
96,971,330-6

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Subscribed and Paid Capital (US$)
488,236,221.33

Corporate Purpose
Research and exploration of geothermal
resources; commercialization of all products,
byproducts and raw materials that derive from
geothermal exploration and the generation,
transmission, distribution and commercialization
of any type of electricity.

Core Business
Generation, distribution and commercialization
of geothermal electricity.

Administration
Performed by a Board of Directors, as stated
by the Corporations Law.

Subscribed and Paid Capital (US$)
23,268,985.7

Corporate Purpose
Research and exploration of geothermal
g e n e r a t i o n b y p e r f o r m i n g s t u d i e s ,

Board of Directors
Walter Moro (Chairman)
Ali Shakhtur Said
Pedro Echeverría Faz
Giuseppe Di Bello

Annual Report Enel Chile 2018Alternate Directors
Liliana Schnaidt Hagedorn
Francesco Tutoli
Jorge Leal Saldivia
Adrien Coudirier

Senior Executives
Guido Cappetti
Chief Executive Officer

Business Relations
1. A contract with Enel Green Power Chile
Ltda. to provide the company engineering
s e r v i c e s , t e c h n i c a l i n s p e c t i o n o f
construction works, contract management,
purchases, public relations, sustainability,
safety and environment, IT services,
accounting, finance, tax, legal services
and other management services related to
administration.

2. A contract with Enel Green Power Chile
Ltda. for trade accounts management.

Business Relations
1. A contract with Enel Chile S.A. for treasury
or trade accounts management. The
transactions among both companies is
subject to an interest rate set at market
conditions.

2. A contract to govern the different types of
guarantees granted by Enel Chile S.A. to
the company (comfort letters, corporate
guarantees and bank guarantees).

3. A general services contract with Enel Chile
S.A. to provide the company security,
general services, human resource,
organizational services, auditing, finance,
communications, legal, sustainability and
other services related to administration.
4. A services contract with Enel Generación
Chile S.A. to provide the company
management support services, regulatory
analysis services, and energy management
services.

5. A contract for technical support provided by

Enel Green Power SpA.

PARQUE EOLICO TALTAL S.A.

PARQUE EOLICO VALLE DE LOS
VIENTOS S.A.

PARQUE TALINAY ORIENTE S.A.

Name
Parque Eólico Taltal S.A.

Type of Company
Privately held corporation

Taxpayer ID
76,179,024-2

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Subscribed and Paid Capital (US$)
8,199,805

Corporate Purpose
Construction, operation, and maintenance of
wind farm generation projects.

Core Business
Wind power generation

Administration
Performed by a Board of Directors, as stated
by the Corporations Law.

Name
Parque Eólico Valle de los Vientos S.A.

Type of Company
Privately held corporation

Taxpayer ID
76,052,206-6

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Subscribed and Paid Capital (US$)
1,157,022.84

Corporate Purpose
Generation, distribution, and commercialization
of wind power or any other source of non-
conventional renewable energy.

Core Business
Wind power generation

Administration
Performed by a Board of Directors, as stated
by the Corporations Law.

Name
Parque Talinay Oriente S.A.

Type of Company
Privately held corporation

Taxpayer ID
76,126,507-5

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Subscribed and Paid Capital (US$)
140,502,351.12

Corporate Purpose
Planning, development and exploitation of wind
power projects.

Core Business
Wind power generation.

Administration
Performed by a Board of Directors, as stated
by the Corporations Law.

Board of Directors
Ali Shakhtur Said (Presidente)
James Lee Stancampiano
Osvaldo Farías Luke

Alternate Directors
José Manuel Astudillo Sepúlveda
Juan Candia Narváez
Adrien Coudurier

Senior Executives
Walter Moro
Chief Executive Officer

Board of Directors
Ali Shakhtur Said (President)
James Lee Stancampiano
Osvaldo Farías Luke

Alternate Directors
José Manuel Astudillo Sepúlveda
Juan Candia Narváez
Adrien Coudurier

Senior Executives
Walter Moro
Chief Executive Officer

Board of Directors
Ali Shakhtur Said (Chairperson)
James Lee Stancampiano
Osvaldo Farías Luke

Alternate Directors
José Manuel Astudillo Sepúlveda
Juan Candia Narváez
Adrien Coudurier

Senior Executives
Walter Moro
Chief Executive Officer

163

Identification of Subsidiaries and Associate CompaniesBusiness Relations
1. A contract with Enel Chile S.A. for treasury
or trade accounts management. The
transactions among both companies is
subject to an interest rate set at market
conditions.

2. A contract to govern the different types of
guarantees granted by Enel Chile S.A. to
the company (comfort letters, corporate
guarantees and bank guarantees).

3. A general services contract with Enel Chile
S.A. to provide the company security,
general services, human resource,
organizational services, auditing, finance,
communications, legal, sustainability and
other services related to administration.
4. A services contract with Enel Generación
Chile S.A. to provide the company
management support services, regulatory
analysis services, and energy management
services.

5. A contract for technical support provided by

Enel Green Power SpA.

DIEGO DE ALMAGRO MATRIZ SPA

Name
Diego de Almagro Matriz SpA

Type of Company
Joint Stock Company

Taxpayer ID
76,306,985-0

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Subscribed and Paid Capital (Ch$)
5,000,000

Corporate Purpose
Construction, exploitation, operation and
maintenance of the Diego de Almagro Solar
photovoltaic solar electricity generation and
transmission project.

Core Business
Operation of solar power plants.

ABC SOLAR 2 SPA

Name
ABC Solar 2 SpA

Type of Company
Joint Stock Company

Taxpayer ID
76,336,638-3

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Subscribed and Paid Capital (Ch$)
1,000,000

Corporate Purpose
Research, development, construction, operation
and maintenance of renewable energy
electricity generation facilities.

Core Business
Development of renewable electricity
generation projects.

Administration
Performed by a Board of Director as established
by the company bylaws.

Directors
Anna Paola Minervini (Chairperson)
Valter Moro
Sergio Guerra Rojas

Senior Executives
Walter Moro
Chief Executive Officer

Business Relations
The company has no commercial relationship
with Enel Chile.

ABC SOLAR 10 SPA

Name
ABC Solar 10 SpA

Type of Company
Joint Stock Company

Administration
Performed by Empresa Eléctrica Panguipulli
S.A. as the only administrator according to
provisions of the company bylaws

Taxpayer ID
76,336,669-3

Senior Executives
Walter Moro
Chief Executive Officer

Business Relations
A contract to govern the different types of
guarantees granted by Enel Chile S.A. to the
company (comfort letters, corporate guarantees
and bank guarantees).

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Subscribed and Paid Capital (Ch$)
1,000,000

Corporate Purpose
Research, development, construction, operation
and maintenance of renewable energy
electricity generation facilities.

164

Core Business
Development of renewable electricity
generation projects.

Administration
Performed by a Board of Director as established
by the company bylaws.

Directors
Anna Paola Minervini (Chairperson)
Valter Moro
Sergio Guerra Rojas

Senior Executives
Valter Moro
Chief Executive Officer

Business Relations
The company has no commercial relationship
with Enel Chile.

MSN SOLAR TRES SPA

Name
MNS Solar Tres SpA

Type of Company
Joint Stock Company

Taxpayer ID
76,349,123-4

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Subscribed and Paid Capital (Ch$)
1,000,000

Corporate Purpose
Research, development, construction, operation
and maintenance of renewable energy
electricity generation facilities.

Core Business
Development of renewable electricity
generation projects.

Administration
Performed by a Board of Director as established
by the company bylaws.

Directors
Anna Paola Minervini (Chairperson)
Valter Moro
Sergio Guerra Rojas

Senior Executives
Walter Moro
Chief Executive Officer

Business Relations
The company has no commercial relationship
with Enel Chile.

Annual Report Enel Chile 2018

PARQUE SOLAR MAIPÚ SPA

Name
Parque Solar Maipú SpA

Type of Company
Joint Stock Company

Taxpayer ID
76,052,135-3

PARRONAL SPA
Name
Parronal SpA

Type of Company
Joint Stock Company

Taxpayer ID
76,499,496-5

ENEL X SPA
Name
ENEL X CHILE SpA

Type of Company
Joint Stock Company

Taxpayer ID
76,924,079-9

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Subscribed and Paid Capital (Ch$)
287,091,109

Corporate Purpose
Research, development, construction, operation
and maintenance of renewable energy
electricity generation

Core Business
Development of renewable electricity
generation projects.

Administration
Performed by a Board of Director as established
by the company bylaws.

Directors
Anna Paola Minervini (Chairperson)
Valter Moro
Sergio Guerra Rojas

Senior Executives
Walter Moro
Chief Executive Officer

Address
76 Santa Rosa Ave., Santiago, Chile

Telephone
(56 2) 2630 9000

Subscribed and Paid Capital (Ch$)
1,000,000

Corporate Purpose
Development, construction, exploitation
and ownership of wind, hydro, and biomass
electricity generation projects and purchase,
sale and commercialization of energy and
capacity.

Core Business
Development of wind power generation
projects.

Corporate Purpose
Develop, implement, and commercialize
innovative, cutting edge technology, products
and services related to energy

Core Business
Commercialize electric goods and services.

Subscribed and Paid Capital (ThCh$)
1,400,000

Directors
Simone Tripepi
Giulio Carone

Administration
Performed by a Board of Director as established
by the company bylaws.

Senior Executives
Karla Zapata Oballe

Directors
Anna Paola Minervini (Chairperson)
Valter Moro
Sergio Guerra Rojas

Senior Executives
Valter Moro
Chief Executive Officer

Business Relations with Enel Chile S.A.
A contract with Enel Chile to provide the
company with communications, human
resource management services, among others.
Prices of services are in expressed in UF.

Business Relations
The company has no commercial relationship
with Enel Chile.

165

Identification of Subsidiaries and Associate Companies

166

Annual Report Enel Chile 201823

Statement of
Responsibility

167

Letter from the Chairman 168

Annual Report Enel Chile 2018Statement of
Responsibility

The Directors of Enel Chile S.A. and its Chief Executive Officer, signatories of this statement, are responsible under oath

of the veracity of the information provided in this Annual Report, in compliance with the General Norm N°30, issued by the

Superintendence of Securities and Insurance (currently, the Financial Market Commission)

CHAIRMAN

Herman Chadwick Piñera

Taxpayer Id: 4.975.992-4

DIRECTOR

Giulio Fazio

Passport: YA 4656507

DIRECTOR

Salvatore Bernabei

Passport: YB 0600187

DIRECTOR

Pablo Cabrera Gaete

Taxpayer Id: 4.774.797-K

DIRECTOR

Daniele Caprini

Passport: YA 9188092

DIRECTOR

Gerardo Jofré Miranda

Taxpayer Id: 5.672.444-3

DIRECTOR

Fernán Gazmuri Plaza

Taxpayer Id : 4.461.192-9

CHIEF EXECUTIVE OFFICER

Paolo Pallotti

Taxpayer Id: 26.102.661-9

Statement of Responsibility

169

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