Understanding Investing in Puerto RicoA very quick overview of investing in renewable energy within the current bankruptcy environment of Puerto Rico's energy provider.
We'll go right to one of Greenbriar's management team, Thomas Emmons, for their input on financing renewable energy projects.
"Another key defensive characteristic of real assets is their relatively low exposure to economic volatility. Thomas Emmons, co-head of direct infrastructure at Voya Investment Management, offered the example of a renewable energy project. “When a renewable energy project sells its power, it’s selling to a utility through a long-term contract that isn’t based on the economic conditions at the time.” The prices or volumes in these contracts don’t fluctuate with growth in gross domestic product, and they’re fixed over many years, regardless of economic circumstances. “Importantly, the utilities are regulated, so they’re very stable; almost every one of them is investment grade. The contract is a very strong, very predictable revenue source, and it absorbs any economic fluctuations in the marketplace. That’s a powerful motivator for investors,” Emmons said.
As mentioned previously the important aspect of financing is the PPOA. As shown above a bankrupt utility company is not investment grade.
Thank you for clarifying Tom