NAIF raises finance cap
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.