New mandate sees Northern investment dollars flow

A new investment mandate for the Northern Australia Infrastructure Fund (NAIF) is helping more major projects get off the ground sooner, according to NAIF Executive Director Peter Ross.

Speaking at the International Mining and Resources Conference 2018 (IMARC) in Melbourne, Mr Ross said the Fund’s investment mandate, introduced in April, was significantly more flexible.

“We are now able to provide up to 100% of the debt finance for a project – up from 50% previously, and we can now also consider smaller projects below $50 million in value, where they meet other criteria,” Mr Ross said.

Since its establishment in 2016, the NAIF has rapidly grown its portfolio. It has moved from having five projects in due diligence in 2017 to making investment decisions on 6 projects last financial year.

“Our loan portfolio now stands at $264 million, on Northern Australian projects valued at $969 million,” Mr Ross said.

“In addition, we have another $750m of loans that are conditionally approved. In total the NAIF expects to soon be supporting projects valued at $2.3 billion, which will provide thousands of jobs in Northern Australia and deliver long term benefits for the region.”

As might be expected in Northern Australia, resource projects feature prominently in the NAIF portfolio. Since June 2017 a third of the projects considered for due diligence by the fund have been resources-related.

Of the six projects sanctioned, three are resource related.

Sheffield Resources’ Thunderbird mineral sands project secured $95 million in finance to develop its LNG power station and reticulation, and upgrade road and port infrastructure to support Thunderbird Mineral Sands Project in WA’s West Kimberley Region.

The NAIF has also signed off on a $95m facility for the Onslow Marine Supply Base, and $15m for the upgrade of the Pippingarra Road, a 70km public road to access the Pilgangoora lithium-tantalum mine being developed by Pilbara Minerals near Port Hedland.

Mr Ross said that as word spread of the NAIF’s capacity, projects inquiries were increasing. The NAIF has experienced a 320% increase in projects undergoing due diligence since September 2017.

Apart from being an infrastructure project in Australia’s north,  to secure NAIF support a project must also have the capacity to repay or re-finance on commercial terms, be of public benefit, and demonstrate that it has an effective Indigenous engagement strategy.

“We encourage resource project investors to also bring forward their ideas and projects to us, to see how we could with them to grow Northern Australia,” Mr Ross said.