242 a.2.) District Funds (DFs): Local institutions established in regions with major natural resource projects, aimed at socio-economic development of affected communities. DFs are generally managed in collaboration with civil society, funded with legally required contributions from mining companies, and finance projects to: (i) improve health, education, and the environment; (ii) increase access to water, sanitation, and energy; and (iii) develop infrastructure, irrigation systems, and watersheds, among others. Examples also include educational endowments at North American and British universities, health funds, fines and TACs such as Fundação Renova10 (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 reserves11, fund long-term projects, or serve12 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 SWF13, , there were 300 sovereign funds in 90 countries, most focused on reinvesting mineral14 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 10 https://transparencia.fundacaorenova.org/institucional/a-fundacao/ 11 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” 12 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),) 13 https://globalswf.com/news/announcing-2024-annual-report-and-presentation 14 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.
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