Investment Guidelines

NAIF is a key participant in the Australian Government’s agenda to unlock the potential of northern Australia for the benefit of all Australians. NAIF looks to support projects and businesses in northern Australia to facilitate economic growth and help catalyse private sector investment.

Pilbara Minerals Limited’s Pilgangoora Operations in Western Australia

Is your project eligible?

NAIF can provide debt or equity finance to projects that satisfy the relevant mandatory criteria in its Investment Mandate. The mandatory criteria require that each project must:

  1. Involve the development or enhancement of infrastructure.
  2. Be of public benefit.
  3. Be in, or have significant benefit for, northern Australia.
  4. For debt finance, be able to repay or refinance NAIF’s debt.
  5. Have an Indigenous engagement strategy.
  6. For equity investments, generate a return to Government.

The projects that NAIF can finance are wide ranging and include physical structures, assets, technology or facilities that contribute to the establishment or enhancement of economic activity in a region.

Examples of the sectors that NAIF can support include, but are not limited to, resources, airports, ports and rail, agriculture, water, energy, social infrastructure (including property, tourism, education and health), manufacturing and telecommunications.

When assessing how much finance to provide to an eligible project, NAIF will seek to implement a reasonable allocation of risk between NAIF and other sources of finance for the Project. Where possible NAIF seeks to “crowd in” other debt and equity financiers to support a project.

NAIF will also assess an appropriate interest rate or target rate of return. At a minimum, the interest rate or rate of return must be likely to cover NAIF’s administrative costs and the Commonwealth’s cost of borrowing.   

In relation to debt financing, NAIF may consider concessional financing tools, including longer loan tenor, deferral of interest and principal repayments, security and/or cashflow subordination and concessional pricing. The concessional terms that may be offered are assessed on a project specific basis and will only be offered where (and to the extent) necessary for a project to proceed.  

For equity investments NAIF must: 

  • target a portfolio return, before operating expenses, of at least the five-year Australian Government bond rate plus 3 per cent per annum; and 
  • be satisfied that there will be opportunities or mechanisms to exit or monetise the investment within the medium term. 

Concessional terms cannot be offered for equity investments. 

NAIF can accept a higher risk than commercial lenders, particularly where the risk relates to factors that are unique to investing in northern Australia, including distance, remoteness and climate. 

NAIF’s finance is not a grant and in all cases loans or other debt finance must be able to demonstrate an ability to be repaid or refinanced.   

NAIF projects must be of public benefit , demonstrating benefits to the broader economy and community beyond an economic return to the project proponent. If NAIF offers any concessional pricing or terms, the quantifiable value of the public benefit must exceed the value of concessions offered.

An Indigenous engagement strategy demonstrating objectives for Indigenous participation, procurement and employment in the region of the project, must also be developed by the proponent for each project financed by NAIF.