A major milestone has been achieved in the Federal Government's vision for Northern Australia as the Northern Australia Infrastructure Facility Act 2016 has been passed and a board selected.
The Northern Australia Infrastructure Facility (NAIF) is an initiative of the Government's development of the region and will offer up a whopping $5b in concessional loans to encourage and compliment private sector investment in Northern Australia. The NAIF will be located in Cairns.
Although the NAIF cannot approve applications untill its formal commencement on 1 July, project financing applications can now be submitted to the Export Finance and Insurance Corporation (EFIC) for consideration.
Chair of the Board, Ms Sharon Warburton will work with the Department of Industry, Innovation and Science and the EFIC to identify potential projects that qualify for a piece of the pie.
Any potential candidates should commence discussions with the EFIC now regarding their project finance proposals so that it may be considered with plenty of time before 1 July 2016, ensuring that there is no delay in financing opportunities once available.
The deadline for the NAIF to decide to grant financial assistance is 30 June 2021, however the NAIF may decide before the deadline to provide financial assistance to a project that commences after the deadline. The NAIF may also vary the terms of financial assistance that was granted before the deadline.
The Invesment Mandate outlines mandatory criteria to be eligible for funding:
- the proposed project involves construction or enhancement of economic infrastructure
- the proposed project will be of public benefit
- the proposed project is unlikely to proceed, or will only proceed at a much later date, or with a limited scope, without financial assistance
- the proposed project is located in, or will have a significant benefit for northern Australia
- the NAIF’s loan monies are not the majority source of debt funding
- the loan will be able to be repaid, or refinanced, and
- the project includes an Indigenous engagement strategy.
Preference will be given to projects which meet one or both of the non-mandatory criteria. These are:
- the proposed project is seeking financing from the NAIF for an amount of $50 million or more
- the project has been identified through a previous Commonwealth, State or Territory assessment process, pipeline, or priority list.
Nothern Australia. Source: Australian Govt
For the purposes of the NAIF, Northern Australia includes all of the Northern Territory, and those parts of Queensland and Western Australia above the Tropic of Capricorn.
It includes areas which intersect with the Tropic of Capricorn and the regional centres of Gladstone (Queensland), Canarvon (Western Australia) and Exmouth (Western Australia), as well as the Local Government Areas of Meekatharra and Wiluna. Territorial seas up to twelve nautical miles offshore adjacent to these areas are also included in the definition.
Projects do not need to be entirely within these boundaries if they produce significant benefits to Northern Australia. For example, a project that enhances north-south connectivity may be eligible.
So if you are a private or public sector proponent of economic infrastructure projects in Northern Australia, including the resources, agribusiness, tourism and medical science sectors - its time to determine if your project complies with the Investment Mandate and start preparing your proposal for project finance now!
If you’re pulling estimates together for your proposals for the NAIF and need to procure rates for plant, equipment, and subcontractors, get in touch with the team at PlantMiner!
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