Heritage and Stabilisation Fund: How Trinidad Keeps Dipping Into the Future to Pay for the Present

The Heritage and Stabilisation Fund was supposed to be Trinidad and Tobago’s financial time capsule.

A vault built from oil money. A rainy-day reserve. A promise to future generations that the energy boom of the 2000s would not vanish into the same fiscal sinkholes that swallowed earlier windfalls.

Nearly two decades later, the fund still exists. It has even grown.

But the story of the Heritage and Stabilisation Fund is also a story of a country repeatedly reaching into tomorrow’s savings to solve today’s problems.

The most recent example is the US$410 million withdrawal recorded in fiscal 2025. Officially, it was triggered by lower-than-expected petroleum revenues. Practically, it went into the government’s Consolidated Fund to support the national budget.

And once the money enters that account, the paper trail becomes far less clear.

In other words, the public knows the savings were tapped. But what exactly the swipe paid for remains far harder to trace.

“The Heritage Fund was meant to save oil wealth for future generations. Instead, it keeps showing up as the government’s emergency credit card.”

To understand why this debate keeps resurfacing, you have to go back to the beginning.

2007: The Birth of the Heritage and Stabilisation Fund

The Heritage and Stabilisation Fund (HSF) was officially created in March 2007 under the HSF Act.

The concept was simple in theory but ambitious in practice.

Trinidad and Tobago’s economy depends heavily on energy revenues. Oil and gas prices swing wildly. When prices rise, governments collect large windfalls. When they crash, public finances can collapse almost overnight.

The HSF was designed to solve two problems at once:

1. Stabilisation – Provide a buffer during periods when energy revenues fall.
2. Heritage – Preserve part of the country’s energy wealth for future generations.

At its launch, the fund inherited roughly US$1.4 billion from the older Interim Revenue Stabilisation Fund, which had been created in 2000.

During the energy boom years, the fund steadily accumulated assets as the government deposited surplus petroleum revenues.

By the early 2010s, it had become one of the Caribbean’s most important sovereign wealth funds.

The Rules: When Can Government Withdraw?

The Heritage and Stabilisation Fund Act allows withdrawals only under specific conditions.

If petroleum revenues fall more than 10 percent below the budget estimate, the government can withdraw up to 60 percent of the shortfall.

The fund also includes an “Exceptional Circumstances” clause, added in 2020, which allows larger withdrawals during national emergencies or economic crises.

However, once funds are withdrawn, they are transferred to the Consolidated Fund, where they are blended into general government spending.

That design keeps the national budget functioning during downturns.

But it also makes it difficult for the public to trace exactly how the money was used.

Every Major Withdrawal Since the Energy Crash

For nearly a decade after its creation, the HSF grew steadily.

Then global energy prices collapsed.

From that point forward, withdrawals began to appear regularly.

Here is a simplified timeline of major drawdowns from the fund:

Despite these withdrawals, the fund has not been depleted.

In fact, as of September 30, 2025, the HSF held US$6.608 billion in assets, up slightly from US$6.445 billion a year earlier, according to the official Heritage and Stabilisation Fund reports published by the Ministry of Finance.

Investment gains and global equity markets have helped offset the drawdowns.

But the pattern is clear.

The fund is no longer just a heritage savings account. It has become a routine fiscal shock absorber.

The Latest Withdrawal: US$410 Million

The 2025 withdrawal totaling US$410,775,703 occurred in two stages.

• US$150 million – November 2024
• US$260.8 million – September 2025

Under the HSF Act, that revenue shortfall allowed the government to access the fund to stabilize public finances. That shortfall becomes easier to understand when you look at the energy price assumptions inside the national budget. In the 2026 budget, for example, government projections were built around specific oil and gas price estimates that directly influence whether the country ends up saving into the fund or withdrawing from it. A breakdown of those projections can be seen in our analysis of the budget here.

Once transferred to the Consolidated Fund, the money effectively became part of the general government budget.

That means the funds likely supported a mix of public expenditure including:

• recurrent government spending
• infrastructure projects
• public sector wages
• debt servicing

But no single project or programme has been publicly identified as the destination of the US$410 million.

For critics, that lack of specificity fuels a recurring question.

If the nation’s savings are being tapped, shouldn’t citizens know exactly what they are paying for?

Governance Concerns Around the Fund

Recent reports have also raised governance questions surrounding the HSF.

According to the Auditor General, the Board of Governors was not constituted between May 17 and August 19, 2025, resulting in a lapse in statutory meeting requirements.

The fund also experienced asset allocation drift.

By mid-2025, equities accounted for 54.1 percent of the portfolio, well above the 35 percent policy benchmark.

That aggressive positioning helped boost returns during strong equity markets.

But it also increases risk if global markets reverse.

The irony is striking.

While the government relies on the fund as a stabilisation buffer, its investment strategy has leaned toward growth assets that can be volatile.

Heritage vs Stabilisation

The central contradiction of the Heritage and Stabilisation Fund lies in its dual purpose.

Saving for the future requires patience and discipline.

Stabilising the economy during downturns requires spending.

Those two missions inevitably collide.

Every time the fund is tapped, the stabilisation mandate wins.

And the heritage mandate quietly shrinks.

“The Heritage Fund promises wealth for future generations. The stabilisation side keeps asking those generations for a loan.”

That tension has existed since the fund was created in 2007.

Nearly twenty years later, the question remains unresolved.

Is the HSF primarily a national savings account for the future?

Or is it a financial shock absorber for the present?

For now, the answer appears to be both.

Which means the country will likely continue dipping into tomorrow’s wealth whenever today’s budget runs short.