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Results

A summary of NAIF’s performance outcomes is included in Figure 3 below. NAIF met seven of its eight performance measures in full and met two of its three metrics for the eighth measure.

The analysis of NAIF’s overall performance should be read in conjunction with the rest of the Annual Report, including the Chairman and CEO Report.

Terms defined in the Northern Australia Infrastructure Facility Act 2016 or the Northern Australia Infrastructure Facility Investment Mandate Direction 2018 have the same meaning in these Statements.

FY18-19 concluded with six Investment Decisions, to offer finance, being made between 1 July 2018 and 30 June 2019 (referred to as FY18-19 Investment Decisions). Across these six Investment Decisions NAIF finance of $479 million was committed for projects with a total capital value of $1.4 billion.

There was also an Investment Decision, to offer finance, of up to $610 million, for the Genex Power Kidston Stage 2 Project. The substantial work associated with that Investment Decision, including extensive Board deliberation, was completed in FY18-19, with the date of the Investment Decision following shortly after on 8 July 2019. This project will be included in the FY19-20 results.

Figure 3: NAIF's Performance Summary for FY18-19

Performance Criterion

Measure

Outcome

1.

Generate public benefit

Net public benefit for northern Australia on each project funded

Achieved. Each of the FY18-19 Investment Decision projects has been forecast to generate public benefit. The total public benefit forecast on the six approved projects totals $1.1bn.[1]

2.

Indigenous engagement

Sustainable Indigenous participation, procurement and employment

Achieved. For each of the FY18-19 Investment Decision projects, an Indigenous Engagement Strategy was provided by the Proponent and assessed by NAIF as satisfactory and meeting the requirements of the NAIF Investment Mandate.

3.

Investments in infrastructure projects in northern Australia

Number of transactions per annum

Achieved. Six FY18-19 Investment Decisions made against a target of between 5-10.

Dollar value of new investments by NAIF per annum

Not met. $479m[2] of new investment commitments for those FY18-19 Investment Decisions by NAIF against a target of between $500m - $1.5bn. Shortfall of $21m.

Total capital value of projects supported per annum

Achieved. $1.4bn[3] aggregate total capital value of projects supported by those new NAIF investment commitments against a target of between $750m‑$2.5bn.

4.

Effective risk management

Compliance with Risk Appetite Statement

Achieved. Internal audit has confirmed compliance with NAIF’s Risk Appetite Statement (RAS) in relation to the Investment Decisions made during the reporting period.

5.

Encourage private sector contribution to financing projects

Number of projects involving private sector financing

Achieved. Four out of six (~67%) of the FY18-19 Investment Decisions had private sector financing in addition to NAIF financing, against a target of 50%.

6.

Raise awareness of NAIF value through dissemination of information to industry stakeholders

Level of communication and stakeholder engagement activity

Achieved. Significant communications and stakeholder engagement activity. This included:

  • Over 36 presentations (by NAIF Board members or executives) at northern Australian or industry forums, conferences and other events, reaching audiences of over 8,800 stakeholders.
  • Other meetings by the Board, CEO and executive with more than 5,500 stakeholders.
  • Prompt publication by NAIF of information on its website including as required by section 17(2) of the Investment Mandate and other NAIF presentation materials, media releases and information updates.
  • Redesign of the NAIF website to improve stakeholder navigation, including new systems to measure and report on website visitation.

7.

Building diverse pipeline of potential infrastructure projects

Industry and geographic spread of potential projects in the pipeline.

Achieved. As at 30 June 2019:

  • There were 86 Active Enquiries[4] compared to 115 Active Enquiries at 30 June 2018.
  • 100 new total pipeline enquiries since 30 June 2018. 16% of the new enquiries had moved into due diligence.
  • The number of projects in due diligence had increased by 81% to 29 from 16 at 30 June 2018. That comprised ~34% of the Active Enquiries compared to ~14% as at 30 June 2018.

The NAIF pipeline categories were diverse from both an industry and geographic spread perspective as follows at 30 June 2019:

  • Active Enquiries spread across QLD: 44%, WA: 43%, NT: 11%, Cross Jurisdictional: 2% diversified across: Resources 38%, Manufacturing 23%, Transport 14%, Renewables & Energy 14%, Tourism and Social 11%.
  • Due Diligence projects spread across WA: 52%, QLD: 38%, NT: 10%, and diversified across: Resources 48%, Manufacturing 22%, Transport 10%, Tourism and Social 10%, Renewables & Energy 10%.

8.

Achieve sound financial performance

Operating expenditure is within the overall five-year departmental appropriation budget

Achieved. NAIF’s operating expenses were within the appropriation budget including the use of retained surpluses from previous year’s budget underspend.

NAIF transaction revenue exceeds operating costs and Commonwealth cost of borrowing

On track. At an Investment Decision portfolio level, over the life of the NAIF supported loans (both currently approved and projected), transaction loan revenue is forecast to exceed NAIF operating costs and Commonwealth cost of borrowing.

[1] The $1.1 billion for the value for the forecast public benefit includes the forecast public benefit for all six Investment Decisions made in FY18-19 (refer 3 of figure 3). It includes the forecast $27 million public benefit for the Pilbara Minerals Investment Decision for the upgrade of the public Pippingarra Road. Following 30 June 2019, the proponent advised that this project will not proceed to financial close (refer to footnote 5).

[2] This includes the value of the NAIF Investment Decision $19.5m for the Pilbara Minerals Investment Decision given it was made in FY18-19. Following 30 June 2019, the proponent advised that this project will not proceed to financial close (refer to footnote 5).

[3] This includes the total capital value of $25m for the Pilbara Minerals Investment Decision given it was made in FY18-19. Following 30 June 2019, the proponent advised that this project will not proceed to financial close (refer to footnote 5).

[4] Active Enquiries comprises projects at various stages of NAIF assessment including initial Active Enquiries, Strategic Assessment, Due Diligence, Execution and Closed Funded.

Visit

https://www.transparency.gov.au/annual-reports/northern-australia-infrastructure-facility/reporting-year/2018-2019-10