The Australian Government has made changed to the investment mandate of the Northern Australia Infrastructure Facility (NAIF) to fast-track projects in Northern Australia.
Main changes include the removal of the 50 per cent cap on the debt taken on by the NAIF, which means the fund can finance up to 100 per cent of a project’s debt.
The $50 million project threshold has also been removed, and the definition of “infrastructure” has been clarified to better reflect the needs of regional and remote areas.
Minister for Resources and Northern Australia Matt Canavan said the action was based on the findings of an independent expert review of NAIF, undertaken by Tony Shepherd AO.
“Mr Shepherd consulted widely with NAIF, investors, project proponents and governments,” Minister Canavan said.
“He found the important need to develop the north still exists, but there have been challenges to making it happen.
“The government shares this view and we are committed to developing industry and job opportunities in Northern Australia.
“We will implement changes to the NAIF Investment Mandate recommended by the expert review, in response to a key finding that the NAIF’s Investment Mandate is too restrictive.
“The government’s amendments will increase its flexibility and improve its potential to support projects in partnership with the private sector and northern jurisdictions.
“In particular, these changes will increase the proportion of a project that NAIF can finance and expand the types of infrastructure that will be eligible for NAIF finance.”
There are currently 17 projects in the due diligence and execution phases across all three northern jurisdictions.
In July last year, Genex Power received approval from the NAIF to proceed to the full due diligence phase for its Kidston project in North Queensland.
“There are 90 active enquiries in the pipeline,” Minister Canavan said.
“These are from diverse sectors including energy generation and gas pipelines, transport, tourism, agriculture, manufacturing, water infrastructure and communications.
“The report commends NAIF for developing this pipeline but recommends that removing some of the restrictions on NAIF could assist in bringing projects to financial close.”
NT chief minister Michael Gunner welcomed the changes.
“The NAIF has the capacity to create jobs for Territorians, but has yet to deliver any loans for Territory projects,” Mr Gunner said.
“The changes confirmed by Minister Canavan today, give the NAIF more flexibility in funding Territory projects and cut red tape for applicants.”