1800 fines and TACs such as Fundação Renova34 (MG), resources seized for philanthropy and crime prevention, and international experiences like debt-for-fund swaps (Germany–Poland). Other forms include governmental revenues (lotteries), welfare funds, environmental endowments, common funds, escrow accounts, and privatization revenues for permanent funds (Gallo & Castro, 2019; Gallo, 2023). b. Sovereign Funds Originating from Natural Resource Exploitation Created by public administration, sovereign funds are established using natural resource revenues or government investments to manage financial reserves35, fund long-term projects, or serve36 as a “liquidity cushion” during crises. They are not primarily intended to promote CDMs, civil society participation, or collective rights, but aim at intergenerational wealth transfer and can also function as political instruments. As of December 2024, according to the Annual Report 2024 by Global SWF37, , there were 300 sovereign funds in 90 countries, most focused on reinvesting mineral38 revenues, such as Ghana’s MIIF and the Kuwait Investment Authority. Generally, they are political structures, though management is sometimes outsourced. Subnational sovereign funds also exist, operating at the provincial, state, or municipal level and managed by local governments rather than the central government. b.1) Subnational Sovereign Funds from Natural Resource Exploitation There is a trend to adapt sovereign funds to state and municipal levels, enabling planned financial management and regional economic stability: b.1.1.) State Sovereign Funds: In Brazil, subnational sovereign funds, though recent, are used by states and municipalities to manage specific purposes with royalties and special participations. In the mining sector, the primary source is CFEM 39 (Constitution of 1988), allocated to states, the Federal District, municipalities, and Union bodies. Royalties apply to oil, minerals, and natural gas (e.g., 5% of gross revenue, plus additional portions), and special participations are proportional to production and profitability of large fields. Legislation allows funds to be used for infrastructure, education, and health, but heavy reliance on current expenditures compromises sustainability. Examples include the Rio de Janeiro Sovereign Fund40, covering 50% of TAC revenues41 and decisions on oil and gas, and Espírito Santo Sovereign Fund42, 34 https://transparencia.fundacaorenova.org/institucional/a-fundacao/ 35 The SWFI (Sovereign Wealth Fund Institute) define these investment instruments as “a state investment fund or entity that is typically established from: balance of payments surpluses, proceeds from privatizations, government transfer payments, fiscal surpluses, and/or revenues from commodity exports” 36 According to the literature, a Sovereign Wealth Fund can have six distinct objectives: intergenerational savings, stabilization, financing, asset portfolio diversification, development and strategic purposes, and social objectives. (Feijó, Feil e Teixeira (2022),) 37 https://globalswf.com/news/announcing-2024-annual-report-and-presentation 38 One of the most referenced is the Revenue Equalisation Reserve Fund (RERF), a fund from Kiribati created in 1956 under British administration of the Gilbert Islands. It originally received its revenues from phosphate mining royalties and today has accumulated assets of approximately USD 1.5 billion. The archipelago has a population of about 120,000 people. 39https://www.gov.br/anm/pt-br/acesso-a-informacao/perguntas-frequentes/contribuicaofinanceira-pela-exploracao-mineral-2013-cfem 40 See Brasil - Lei Complementar nº 200, de 02 de março de 2022, oriunda do Projeto de Lei Complementar nº 42, de 2021e DECRETO Nº 49.023 DE 01 DE ABRIL DE 2024, RJ 41 Lei Complementar no 133, de 6 de novembro de 2020 42 Vide - https://fundosoberano.es.gov.br/
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