All private securities listed through online investment platforms and Exempt Market Dealers (EMDs) like SVX are likely to carry more risk than those available on the public markets. Our goal it to make you aware of those risks before making an investment.
Important disclosures about our investment criteria, risks of an investment in the Fund, conflicts of interest and risk mitigation procedures are outlined in the Fund’s Private Placement Memorandum. All investors should read the Private Placement Memorandum and the Limited Partnership Agreement, dated July 17th 2018, before investing in the Fund. The following risks have been identified for investors:
Lack of regulatory review: Limited Partners under this Offering will not have the benefit of a review of this Private Placement Memorandum by any regulatory authorities.
Business risks: The Manager is a company with a limited operating history and track record. There is no guarantee that the Manager will continue to operate in the future.
Liquidity risks: While CoPower intends to make liquidity options available, there is a risk that any and all of these liquidity options will not be available. While the intention is to have the Fund roll-into Fund IV after 24-36 months, , there is no guarantee that this roll-over will occur and Investors should be prepared to remain in long term investments for the full term.
Exchange rate risks: A portion of the fund may be invested in projects with some exposure to USD currency fluctuations. Those Investments are subject to exchange rate risk, whereby if the CAD strengthens against the USD, returns may be diluted.
Underlying asset risks: This investment relies on the performance of a set of underlying assets: the funded clean energy projects for energy efficiency. CoPower conducts a thorough due diligence process to assess each investment opportunity. We review the underlying project investment, the partners, the investment structure, the counterparty and credit, the equipment performance, and other material factors. There are however risks inherent to making these investments and investors should understand that their principal is at risk. These risks include:
- Counterparty risk: The Fund targets investments in projects that have offtake agreements with a counterparty that is deemed by the Investment Committee to have satisfactory credit. There is no guarantee that a counterparty’s credit will continue in the future. Upon the event that a counterparty defaults on its payment obligation, investor capital may be at risk.
- Performance and operational risk: In some cases, investments may be tied to performance and ongoing operation of energy equipment to generate energy, power, or other generate other types of carbon reduction. Project revenue may fluctuate according to amount of resource (for example, amount of solar irradiance in a quarter) and the performance of clean energy technologies. Risks related to performance or operations could materially impact the returns of the project, including risk to investor capital.
- Sponsor risk: The Fund may invest in Projects where the Sponsor/Developer of the Project has a limited corporate operating history. The Sponsor may have ongoing contractual obligations to the Project including asset management, operations, and/or maintenance, There is no guarantee that the Sponsor will continue to operate in the future, and the Fund may have to contract a new party or step in to perform these roles, which could materially impact the returns of the project.
- Regulatory risk: In some cases, investments in projects may rely on existing regulations. This may include but not be limited to: i) Clean energy projects that enter into long term offtake contracts with government or quasi-government entities; and, ii) Clean energy projects whose revenues rely in part or in whole, on various clean energy credit programs. These credit and/or regulatory programs may change in the future, which could materially impact investor returns, including loss of capital.