The Government of Saint Lucia has established a vehicle to create wealth for the country called the Sovereign Wealth Fund of Saint Lucia.
And this week the Cabinet of Ministers approved its creation describing it as a forward-thinking public investment fund designed not only to secure sustainable economic development but also to bolster Saint Lucia’s climate resilience.
The Sovereign Wealth Fund of Saint Lucia sets an example for Saint Lucians to develop a habit of saving and investing in the future. The government is calling on Saint Lucians to recognise the transformative power of savings.
Key Characteristics of the Sovereign Wealth Fund of Saint Lucia:
1. The sovereign wealth fund’s objective shall be to support investments in climate adaptation and mitigation in addition to sustainable economic development.
2. That the sovereign wealth fund be a public fund managed by a board, which shall be a corporate body.
3. That the board shall devise investment guidelines that bind the performance of the investment manager, and that these guidelines should prioritise the following principles:
a. That a ‘high’ return target be the primary motivator before the attainment of set thresholds.
b. That thresholds to trigger non-investment withdrawals be defined, with these triggers being tied to portfolio size relative to GDP.
c. That the fund be invested according to the Environmental, Social, and Governance (ESG) principles; and
d. That derivatives and similar instruments be used only for hedging purposes; and
4. That the resources of the fund shall consist of such funds as may be allocated by the Minister to the fund on its commencement.