The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

The Attorney General yesterday hailed the National Investment Funds Bill (IFB) for providing a structure that will allow the Government’s ownership interests in private companies to be professionally managed.

Ryan Pinder KC, speaking in the Senate during his contribution to the debate on legislation that will replace the existing Sovereign Wealth Fund Act, said: “We promise to have an equity investment fund where government’s private sector shareholdings are held and managed in a professional and transparent manner.

“This National Investment Bill establishes the framework to deliver on all these promises to the Bahamian people in a transparent and internationally-recognised manner of good governance.” The Government and its agencies hold equity stakes in numerous companies, including the Bahamas Telecommunications Company (BTC), Aliv, the Arawak Port Development Company (APD) and Bank of The Bahamas.

Mr Pinder said the Bill incorporated corporate governance best practices, as well as holding out the possibility for the Bahamian public to take ownership positions in some of the National Investment Fund’s sub-funds and investments. He added that the Bill was drafted to be in compliance with the Santiago Principles, which promote transparency, good governance, accountability and prudent investment practices for sovereign wealth funds.

The Sovereign Wealth Fund Act 2016, which was created to receive potential royalties from oil exploration in Bahamian waters, has been little used over the past six years. Its replacement is designed to give new direction and purpose to the intent of maximising returns on the country’s natural resources for the benefit of the Bahamian people.

Mr Pinder added: “The natural resource assets of The Bahamas generally consist of valuable land, aggregate and other materials. Additionally, the implementation of the Carbon Credits Trading Act 2022 has established revenue derived from carbon credit trading as a potential revenue base for the country, based on our natural fauna and climate activism and reform.

“As the various elements of this administration’s economic diversification plan continue to advance, a robust sovereign fund regime will be required for the proper management of existing and future natural resource wealth of The Bahamas. The National Investment Fund Bill sets the framework to ensure that all these purposes are structured recognising global standards in good governance, transparency and independent management.

Mr Pinder continued: “To ensure that there is professional management and advice, the Bill provides for an Investment Committee with majority membership not being members of the Board but being private sector participants who have substantial professional expertise and experience.

“These requirements of the Investment Committee are set out in the Second Schedule of the Bill. Furthermore, the engagement of professional asset managers is prescribed, such asset managers being licensed and regulated by the Securities Commission of The Bahamas.”

The Bill is also designed to help the Government tap into private capital to ensure the viability of the Bahamas Resilient Infrastructure Fund (BRIF) that is targeted primarily at Family Island development. “Our Government seeks to advance a private capital mobilisation (PCM) strategy for The Bahamas and will establish, operationalise and fund the BRIF to accomplish this,” Mr Pinder said.

“The PCM strategy aims at optimising private capital for building sustainable and resilient infrastructure, with a focus on the Family Islands. This strategy follows several studies that indicate infrastructure investment is a key tool for improving productivity, stimulating economic growth, generating jobs, addressing inequalities and building resilience.

“An investment platform supporting the PCM strategy for infrastructure investment is comprised of the BRIF and three sector specific funds, namely the renewable energy fund, the fund for the Family Islands, and food security fund. These were chosen based on sector analysis and policy priorities of the Government,” he continued.

“The establishment of the BRIF and the sector funds, in the context of the larger PCM strategy, will provide the proper signals to international and domestic investors about the investment opportunities in The Bahamas. When fully implemented, the PCM will have introduced a robust and transparent way to finance infrastructure developments in The Bahamas and to create sustainable wealth for Bahamians.”