Indigenous Sovereign Wealth Fund
Our Indigenous Sovereign Wealth Fund (ISWF) is similar in structure and investment strategy to pension funds and other sovereign wealth funds around the globe.
Approximately 80% of the annual cash-flow from the TMX’s Indigenous ownership portion will flow into The Fund. The ISWF will be invested with a focus on the global energy transition; repurposing the oil and gas found beneath our traditional territories into financial wealth for our Nations, in this new low carbon economy.
Sustainable Indigenous wealth creation is paramount for our economic sovereignty. The Fund will build a better future for future generations.
Equity ownership in TMX with no up-front capital?
Our communities are not burdened with financial project risk. Like a mortgage structure, large infrastructure project lenders make money through debt repayment and interest payments, with the TMX assets serving as collateral.
Once operational, revenues and profits from TMX will generate all repayments to the banks. The balance of profits flow to the 100% Indigenous-owned ISWF. In short, we own a Sovereign Wealth fund that meets OUR criteria of sustainability and provides funding for each of our communities’ unique needs, without providing project funding.
How does my community benefit?
Those Nations that sign on with our Project will receive equity shares in our 100% Indigenous-owned company. Profits from the pipeline’s operations will flow to this Company. From there a portion of profits will be distributed directly to signed Nations (Per Capita Distributions) while the remaining, majority of funds will be invested in the 100% Indigenous-owned ISWF.
Assuming the pipeline is operational by 2022, we estimate the Indigenous Sovereign Wealth Fund will generate annual distributions of approximately $325 million by the end of this decade.
By 2030, we project the ISWF will have approximately $5.5 billion of assets under management. In keeping with our environmental mandate, the focus of the ISWF will be on investing in clean, green, low-carbon energy and infrastructure projects. This ensures our partner Nations gain a serious financial stake in the new low carbon global economy. It will provide prosperity for our communities today and for generations to come. We will become one of Canada’s largest investors in renewable energy.
Has it been done before?
Our model’s success will be historic and unprecedented in terms of both scale and positive impact. It is not, however, the first example of successful Indigenous investment in the energy industry.
The Fort McKay and Mikisew Cree First Nations equity interest purchase in Suncor’s East Tank Farm in 2016 is an example of successful Indigenous investment and partnership with industry. This project provides predictable revenues that Chiefs and Councils use to plan and budget, improving their communities as they see fit. The purchase will provide these First Nations with revenue for decades to come.