Northern Australia Infrastructure Facility to undergo reform to make it more flexible, able to take on riskier projects

RISKIER projects will be able to tap into the federal government’s multibillion-dollar loan program designed to spur major construction in Northern Australia under sweeping new reforms that include bypassing state or territory governments.

RISKIER projects will be able to tap into the federal government’s multibillion-dollar loan program designed to spur major construction in Northern Australia under sweeping new reforms that include bypassing state or territory governments.

Northern Australia and Resources Minister Keith Pitt will today reveal the commonwealth’s pandemic-era budget will include a major shake-up of the Northern Australia Infrastructure Facility (NAIF) to make it easier and faster to release loans for major construction projects.

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Keith Pitt, Minister for Resources, Water and Northern Australia.

Changes to the NAIF, which come off the back of a recent statutory review, include giving it the option in some cases to lend directly to project proponents instead of going through state and territory governments.

It’s argued cutting out the middleman will allow the NAIF to move projects to contractual close faster.

The NAIF will be given “flexibility” to take on “riskier projects”, with the commonwealth to give itself the ability to take on majority financial risk.

The NAIF will also be able to establish “on-lending partnerships” with “local financiers”, which include banks and government-run lenders, to make it easier for proponents of smaller projects to grab a slice of the loan pie.

The restrictive definition of “public benefit” will be expanded to factor in jobs, regional income, local supplier spend and Indigenous businesses and communities.

Once restricted to funding physical construction works, the changes will allow proponents to use the loans to buy equipment, train staff and expand existing operations.

A government representative will be appointed to the seven-member NAIF board under governance changes that include swapping members out for those with Indigenous development experience.

The minister will also be allowed to tick off on NAIF investment decisions that land on his table sooner, instead of waiting the 21 days.

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“We have listened to stakeholders in the north, and are making changes to empower the NAIF with more flexibility to help drive economic recovery and population growth,” Mr Pitt said.

Earlier this year the NAIF deadline was extended to 2026. A Senate inquiry in August revealed just $169.2m, or 3.38 per cent, of its entire purse had been released to projects.