Alternate word order allowed: Swan kílu an helíyel ("is blue this sky"). *An helíyel kílu swa-n ("this sky blue is") and *Kílu swa-n an helíyel ("blue is the sky") are not allowed, because the predicate adjective must directly follow swa. *Helíyel swa-n kílu is also not allowed, because the lack of an makes the sky not proximate; Helíyel swaim kílu is allowed, though.
Also note that the sky is kílu (cyan, what we would consider light blue) during the day, rather than húsu (dark blue). Both of these are basic color terms.
This statement expresses roughly the same amount of certainty as An helíyel swa-n kílu ("the sky is blue"), but also says that the speaker got the information from direct perception (especially sight). Contrast with the version without hwel, where there's more uncertainty about whether the sky actually is blue.