NAIF raises fi­nance cap

The Cairns Post - - NEWS - CHRIS CAL­CINO­ editorial@cairn­­sPost www.cairn­ twit­­sPost

A FIS­CAL yoke around the North­ern Aus­tralia In­fra­struc­ture Fa­cil­ity’s neck will be cut un­der a suite of changes aimed at lim­ber­ing up the cum­ber­some $5 bil­lion fund.

Min­is­ter for North­ern Aus­tralia Matt Canavan will today re­veal the Fed­eral Gov­ern­ment’s plan to re­move a 50 per cent cap on how much of an in­fra­struc­ture project’s debt NAIF can fi­nance.

The re­vi­sion means the fund will be able to ser­vice up to 100 per cent of a project’s debt – al­though pro­po­nents will still be re­quired to re­pay or re­fi­nance the loan on con­ces­sional terms.

Se­na­tor Canavan said the changes were based on an in­de­pen­dent re­view un­der­taken by Tony Shep­herd, which found the scheme was overly re­stric­tive.

“With the ad­di­tional flex­i­bil­ity that comes from these changes, the gov­ern­ment looks for­ward to further de­vel­op­ing more in­fra­struc­ture in the North,” he said.

The gov­ern­ment will “loosen the gap test”, which ini­tially deemed NAIF could only back projects if they would not go ahead with­out fund­ing, or if that fi­nan­cial as­sis­tance would speed up de­vel­op­ment.

The amend­ments also re­de­fine the term “in­fra­struc­ture” so NAIF can fi­nance a broader range of projects.

“Un­like more de­vel­oped ar­eas, there is of­ten very lit­tle ex­ist­ing in­fra­struc­ture avail- able to pro­po­nents,” Sen Canavan said.

“This means that foun­da­tional in­fra­struc­ture will of­ten form part of a pro­po­nent’s pro­posal. It is im­por­tant that the NAIF con­sid­ers fi­nanc­ing this in­fra­struc­ture too, as it is of­ten in­te­gral to a broader pro­posal.”

Sen Canavan said op­er­a­tional changes would help fun­nel more projects into the lat­ter stages of the in­vest­ment pipe­line, es­pe­cially through the es­tab­lish­ment of re­gional de­vel­op­ment hubs.

“The gov­ern­ment will work to link ex­ist­ing pro­cesses with the NAIF, par­tic­u­larly our Ci­ties agenda and the Ma­jor Project Ap­provals Agency,” Sen Canavan said.

“I am work­ing with rel­e­vant ministers to iden­tify and ex­ploit mu­tu­ally ben­e­fi­cial op­por­tu­ni­ties in this re­spect.”

RE­FORMS: North­ern Aus­tralia Min­is­ter Matt Canavan.

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