However slowly, progress is being made by the Northern Australia Infrastructure Facility (NAIF), according to a recent update from NAIF CEO Laurie Walker, who says 63 projects are in an active phase, ten projects are in the Due Diligence or Execution phase, and an Investment Decision has been made.
Established on 1 July 2016 in an effort to encourage and support investment in infrastructure in Northern Australia through the provision of loans to eligible project proponents, NAIF may approve loans up to 30 June 2021 with a total $5 billion in aggregate available.
Since its establishment, the NAIF pipeline has grown to 140 inquiries across a range of sectors and in all Northern Australian jurisdictions (Western Australia, Northern Territory and Queensland), however with no loans approved after the first year of operation, the NAIF Board has been under considerable pressure to make an Investment Decision.
What are the stages with NAIF?
The Due Diligence stage is an opportunity for the proponent to provide more detailed information to the NAIF board, such information forming the basis of a formal Investment Proposal. The submission of an Investment Proposal by a proponent is considered a formal application for NAIF financial assistance.
The Investment Decision and Execution Stage is the final stage of the NAIF investment decision process, the stage at which the NAIF Board will consider the Investment Proposal and whether it will make an Investment Decision to offer (or not offer) finance. An Investment Decision may be conditional and will not be made if the relevant State or Territory indicates that financial assistance should not be provided. After a recommendation is given to the responsible Commonwealth Minister, the Minister has 21 days to consider (and reject) the proposal under section 11 of the NAIF Act, before the relevant documentation will be finalised.
The NAIF project pipeline
Of the ten projects in the Due Diligence and Execution phases, two are located in the Northern Territory, three are located in Western Australia, and the remaining five are located in Queensland. These projects are split across the Renewables, Transport, Resources and Tourism sectors.
In September 2017, the NAIF board made its first Investment Decision, proposing to offer financial assistance of around $16.8 million to the Onslow Marine Support Base in Western Australia for a multi-user infrastructure port and marine supply project. The project will provide supply and support services for onshore and offshore businesses such as logistics, fuel suppliers, waste management and construction and maintenance companies in the Canarvon Basin.
On 3 November 2017 the Western Australian Government announced that it has signed a Master Facility Agreement with the Federal Government to allow eligible infrastructure projects in Western Australia to receive NAIF funding. It's also announced that it will be formally reviewing the Onslow proposal in coming weeks. Provided the WA Government gives the Onslow proposal the green light, we could be seeing the first NAIF funded project underway in the new year.
This first NAIF Investment Decision has put eyes back on NAIF as we eagerly await news as to the remaining nine projects in the Due Diligence phase and the next Investment Decision.