PERTH (miningweekly.com) – The Australian government has announced reforms to the Northern Australian Infrastructure Facility (NAIF), which will provide more flexibility, increased risk appetite and widen the scope of projects eligible for funding.

Minister for Resources, Water and Northern Australia Keith Pitt said the changes would be in addition to the five-year extension to NAIF operations until June 2026.

“The reforms to NAIF will ensure the A$5-billion facility will have more flexibility to bankroll investment in a wider range of projects across Northern Australia,” Pitt said.

“The government is committed to creating jobs across northern Australia to help the region play a stronger role in Australia’s economic recovery. We have listened to stakeholders in the north, and are making changes to the NAIF, more flexibility will help drive economic recovery and population growth."

Assistant Minister for Northern Australia Michelle Landry said these reforms come off the back of the NAIF statutory review that found that while the NAIF is seen to be an important vehicle of investment in the north, more can be done.

“We are determined to open up further opportunities to strengthen northern Australia’s contribution to our economy by continuing to support infrastructure and development,” Landry said.

“NAIF has already invested A$2.4-billion in sectors including health, education, resources, energy and agriculture, supporting A$4.4-billion in total project value and more than 7 200 jobs.”

Key changes to the NAIF will include the option to lend directly to project proponents in certain circumstances, which will simplify the lending process and reduce administrative burden, and permitting the NAIF to establish on-lending partnerships with local financiers to improve access to NAIF finance for smaller project proponents.

The reform will also make the NAIF finance available to additional elements of infrastructure construction, such as equipment purchases or leasing, training, and the expansion of existing business operations, while the definition of public benefit applied when assessing projects will be expanded to include consideration of factors such as jobs, regional income, and opportunities for local suppliers, Indigenous businesses and communities, simplifying the application of public benefit tests to projects applying for NAIF finance. 

The definition of northern Australia will also be extended to include the Shire of Ngaanyatjarraku in Western Australia, the borders of which sit further north than those of some other local government areas already included in the definition, making the expansion a logical amendment.

Furthermore, Pitt said that given the scale of the economic challenge faced, it is only practical to provide the NAIF the flexibility to support riskier projects with the potential to deliver significant public benefit. The changes will include removing the prohibition against the Commonwealth assuming the majority of risk in any project.

A number of changes will also be made to strengthen the governance of the NAIF as it evolves with these reforms. These will include the appointment of a government representative to the NAIF board; ensuring the board includes members with experience in Indigenous development; and allowing the Minister to take earlier decisions not to reject a NAIF investment decision.

The government will soon introduce legislation to Parliament to give effect to these reforms.