Resources, energy and Northern Australia minister Josh Frydenberg has announced a $5 billion fund for infrastructure in the nation’s north.
The Federal Government released a consultation paper to seek feedback on the proposed design and operation of a $5 billion Northern Australia Infrastructure Facility (NAIF) on Monday.
The NAIF is described as the “cornerstone” of the Northern Australian White Paper, released by the Government in June.
“Commencing in 2016-17, the NAIF will offer up to $5 billion in concessional loans over five years to encourage and complement investment in northern Australian infrastructure,” Frydenberg explained in a joint statement.
“NAIF loans will be used to finance major economic projects, like airports, ports, roads, rail, energy, water and communications infrastructure.
“The loans will help to build the economic capacity and longer term expansion of industry and population in northern Australia, and deliver public benefit to all Australians.”
The Government is keen to see development in Northern Australia, a region covering 40% of the nation’s landmass, and contributing more than 11% to its GDP, despite having only 5% of the population.
“Importantly, the NAIF will not crowd out private investment, but will work in partnership with the private sector and the Northern Territory, Queensland, and Western Australia governments,” Frydenberg explained.
The consultation paper released by the minister on Monday sets out the proposed NAIF administration structure.
The Government intends to appoint an independent statutory board to make investment decisions.
A number of NAIF eligibility criteria are established, including that:
- projects involve construction or enhancement of economic infrastructure
- projects are of public benefit
- a project is unlikely to proceed or will proceed at a much later date without NAIF assistance
- NAIF finance will be able to be repaid
- NAIF loans should be for at least $50 million, and
- NAIF finance must not exceed 50% of total project debt.
The final two conditions essentially mean a NAIF-eligible project must be worth at least $100 million.
“The NAIF has the potential to be a game changer for northern Australia, so it is important that it works as effectively as possible,” Frydenberg said. “With this in mind, I encourage all interested stakeholders to participate in the consultation process.”