Annual Report 2010 - Enel.com

Country risk
By now, some 50% of the revenues of the Enel Group
are generated outside Italy. The major international expansion
of the Group – located, among other countries,
in Latin America and Russia – therefore requires Enel to
assess its exposure to country risk, namely the macroeconomic,
financial, regulatory, market, geopolitical and
Other risks
Breakdowns or accidents that temporarily interrupt operations
at Enel’s plants represent an additional risk associated
with the Group’s business. In order to mitigate such
risks, the Group adopts a range of prevention and protection
strategies, including preventive and predictive maintenance
techniques and technology surveys to identify
and control risks, and implement international best practices.
Any residual risk is managed using specific insurance
policies to protect corporate assets and provide liability
coverage in the event of harm caused to third parties by
accidents, including pollution, that may occur during the
production and distribution of electricity and gas.
social risks whose manifestation could have a negative impact
on income or jeopardize corporate assets. In order to
mitigate this form of risk, Enel has adopted a country risk
calculation model (using a shadow rating approach) that
specifically monitors the level of country risk in the areas in
which the Group operates.
As part of its strategy of maintaining and developing its
cost leadership in the markets in which it has generation
operations, the Group is involved in numerous projects for
the development, improvement and reconversion of its
plants. These projects are exposed to the risks commonly
associated with construction activities, which the Group
mitigates by requiring its suppliers to provide specific
guarantees and, where possible, obtaining insurance coverage
against all phases of construction risk.
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