COVID-19 FAQ – Skyline Clean Energy Fund
Q: Is it still safe to be invested in the green energy sector at this time?
A: Skyline Clean Energy Fund’s management team believes that it remains advantageous to be invested in the green energy sector at this time. SCEF has currently had no downside impact related to the global COVID-19 pandemic, nor related to the public market and social turmoil. As long as the sun continues to shine, your investment in SCEF is hard at work.
Every clean energy asset in SCEF’s portfolio is backed by the Ontario provincial government through the Independent Electricity System Operator (IESO). IESO is rated A (high) with a stable outlook by DBRS Morningstar, and Aa3 with a stable outlook by Moody’s, both global credit rating agencies that represent investment-grade ratings.
Q: Is SCEF’s revenue going to be affected by potential business closures?
A: SCEF’s revenue is generated through fixed long-term government contracts where the only variables are downtime (due to general maintenance or equipment failure) and weather-related events. Neither of these variables are correlated in any way to public market performance. Generally speaking, solar assets are passive investments that do not need frequent service. Normal annual scheduled visits will continue without interruption.
Q: Will declining interest rates affect SCEF?
A: SCEF is working diligently to take advantage of falling interest rates, as this presents an opportunity to finance currently unleveraged assets, and also to refinance currently leveraged assets at improved rates.
Q: What do SCEF’s Senior Management Team believe are the biggest risks at this time?
A: For now, the largest potential negative impact of coronavirus on SCEF would be from a delay in receiving materials (e.g. solar panels) from China and other countries. Most of the parts needed to operate SCEF’s assets are off-the-shelf electrical components that are readily available, and SCEF has sufficient materials on hand through to the end of 2020.
Q: Is SCEF moving forward with planned acquisitions in the near future?
A: SCEF is working to close four (4) renewable energy assets under contract before the summer season, with the objective of maximizing solar revenue before the prime generation months (June, July, August). These assets will be purchased with cash on hand and assumption of existing project level debt.
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