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NAIF's Role

The NAIF Act states that the objective of NAIF is to provide financial assistance to States and Territory for the construction of northern Australian economic infrastructure, that is infrastructure that provides a basis for economic growth and stimulates population growth in northern Australia.

NAIF's Investment Mandate sets out the five mandatory eligibility criteria that each project must satisfy. For all projects there is a requirement for NAIF finance to be able to be repaid or refinanced.

The infrastructure that NAIF can finance is wide ranging and includes assets that facilitate the establishment or enhancement of business activity or increase economic activity in a region.

Examples of the types of projects that may be eligible include, but are not limited to ports, airports, rail, roads, water, energy and communications networks, social infrastructure (including health, education, research, training and related accommodation facilities), processing facilities (including abattoirs and agricultural processing plants) and transhipment vessels. Eligible projects must bring new capacity online either through the construction of new infrastructure or by materially enhancing existing infrastructure.

NAIF can provide up to 100 per cent of debt funding for an eligible project provided there is appropriate risk sharing. However, when determining which projects to fund, NAIF considers the potential of its investment to encourage private sector participation in financing the project. In contrast to private sector lending, NAIF’s financing can, if necessary, be concessional, including longer loan tenor, or deferral of interest and principal repayments or security subordination. NAIF is only able to offer the minimum concessions necessary for a project to proceed.

NAIF can accept a higher risk than commercial lenders, particularly where the risk relates to factors that are unique to investing in northern Australia, including distance, remoteness and climate.

NAIF projects must be of public benefit (being broad based and must demonstrate benefits to the broader economy and community), beyond those captured by a project proponent. In offering any concessions, NAIF must have regard to the extent of the forecast public benefit.

An Indigenous Engagement Strategy demonstrating objectives for Indigenous participation, procurement and employment, reflecting the Indigenous population in the region must also be developed by the proponent for each NAIF project.

NAIF came into effect on 1 July 2016 as a corporate Commonwealth entity under the Northern Australia Infrastructure Facility Act 2016 (NAIF Act ), which was passed with bipartisan support.

Other Commonwealth legislation including the Public Governance, Performance and Accountability Act 2013 (PGPA Act) also governs NAIF’s operations.

The NAIF Act states that the objective of NAIF is to provide financial assistance to States and Territory for the construction of northern Australian economic infrastructure, that is infrastructure that provides a basis for economic growth and stimulates population growth in northern Australia.

NAIF’s responsible minister is the Minister for Resources and Northern Australia. The Minister appoints NAIF’s independent Board and has given NAIF direction through the NAIF Investment Mandate Direction 2018 (Investment Mandate). The Minister has also issued a Statement of Expectations which outlines his expectations on the operation and performance of NAIF, beyond that considered by the legislative framework.