Application and Approval Procedure

Application and Approval Procedure

NAIF’s investment decision process is governed by the Investment Mandate Direction 2018 and the NAIF Act 2016. A high-level summary of that process is shown in the diagram below.

Please note the below application and assessment process is a guideline only and may vary depending on the type and suitability for the project.


1. Enquiry and Preliminary Assessment Stages

The NAIF can engage with a proponent early in the development phase of a project. A proponent will be asked to enter into arrangements relating to confidentiality.

To assist with NAIF’s initial review of a proposed project, NAIF will request some initial high-level enquiry information.

This may include if available, a proponent’s view of the following:

  • high-level project information (e.g. size, scope, key features etc.)
  • project proponent, participants and sponsors
  • funding plan
  • development timeline
  • business plan or preliminary studies
  • commentary on how the project is expected to satisfy the mandatory and non-mandatory eligibility criteria
  • any other supporting information which may be available to support the initial enquiry

The enquiry information will allow NAIF to assist a proponent with advancing their enquiry. NAIF will treat business information received from a proponent at each stage of the process as confidential. It will be used and disclosed only as needed to progress a proponent’s application, and for related purposes, or to the extent that NAIF is required to disclose it (e.g. where law requires disclosure).

2. Strategic Assessment Stage

The Strategic Assessment Stage will include a review of the high-level enquiry information and the below information package, to enable the Board to determine whether it wishes to dedicate further resources to investigating the project.

During the Strategic Assessment Stage, a proponent will be requested to provide an information package which if feasible, should look to include the following information:

  • background of project proponent(s), participants and sponsors, including experience, financial profile and shareholders and proposed governance
  • further detail on the project scope and project plan including a capital expenditure breakdown for the project
  • detailed business plan and/or feasibility study
  • indicative funding plan and capital structure (debt and equity mix)
  • project financial analysis
  • social and environmental analysis or commentary
  • overview of status of regulatory and native title issues and approvals
  • project’s development status and timeline
  • requested NAIF investment (amount, tenor, repayment profile and requested concessionality) and rationale for any requested concessionality attached to the NAIF investment
  • proposed high-level term sheet
  • detailed response to all NAIF eligibility criteria including:
    • status of commercial banking market funding support
    • analysis of the commercial or other financiers’ market funding gap
    • high-level public benefit analysis of the project
    • information about the proposed Indigenous Engagement Strategy

After the NAIF Board has undertaken the strategic assessment, the NAIF will provide guidance to the proponent on advancing discussions further. The NAIF Board’s deliberations in respect to enquiry information, information regarding a proponent’s proposals, applications, expressions of interest or strategic assessments are confidential.

The decision to continue investigating a project following the Strategic Assessment Stage does not constitute an Investment Decision. It does not indicate whether the NAIF investment criteria will be met or whether the NAIF Board would make an offer to participate in the financing of a project. It is also not an indication that the Board endorses any specific terms of or any conditions of any financing for that project.

3. Due Diligence Stage

Detailed due diligence will commence once the Board has completed its Strategic Assessment, and has decided that NAIF will continue investigating the project. Due diligence information should be provided in the format of a comprehensive information memorandum which includes but is not limited to:

  • finalised and where appropriate, independently verified versions of the type of information identified for the strategic assessment stage
  • independent assessment of the public benefits of the project
  • comprehensive audited financial model
  • independent project technical risk assessment
  • independent market expert reports
  • project risk allocation analysis
  • other independent expert reports, as required
  • detailed environmental and social impact assessment
  • an Indigenous Engagement Strategy
  • supporting private sector financing documentation (term sheets and commitment letters)

The due diligence process will involve project, credit risk, environmental and social analysis.

NAIF will work collaboratively with a proponent and co-financiers to develop appropriate NAIF loan terms and conditions noting that the level of concessions provided by NAIF is to be the minimum required for the project to proceed.

NAIF will also consult with, as appropriate and required, relevant Commonwealth, State and Territory government stakeholders and conduct any relevant third party verification. Where an Investment Decision is greater than $100 million, NAIF will consult with Infrastructure Australia.

The Due Diligence Stage information will form the basis for a proponent to make its formal Investment Proposal to be submitted for consideration by the NAIF Board. Submission of the Investment Proposal is considered a formal application for NAIF financial assistance. Guideline on the format of an Investment Proposal is available here.

4. Investment Decision and Execution Stage

During this stage, the NAIF Board will make a formal Investment Decision (being a decision to offer or not to offer financial assistance). It may be made conditional on documentation and if it is, the formal Investment Decision will only be made upon the relevant documentation conditions being satisfied and if no objection from the Minister or the relevant State or Territory (refer below). If and once a decision is made, the NAIF will work with a proponent to finalise the conditional financial assistance arrangements, subject to customary conditions precedent.

Refer to the NAIF Act 2016 and Investment Mandate for considerations of the NAIF Board in making an Investment Decision including a preference for a diversified portfolio.

The NAIF will not proceed with making an Investment Decision, and further consideration of an Investment Proposal will cease if at any time the relevant State or Territory Government provides written notification that financial assistance should not be provided to the project.

The responsible Commonwealth Minister will also consider the project and can submit a Rejection Notice if he or she determines that financial assistance should not be provided. Bases for a Rejection Notice include where the assistance would be inconsistent with the objectives or policies of the Australian Government; or have adverse implications for security; or have adverse impact on Australia’s international reputation or foreign relations.

NAIF will notify a proponent and relevant stakeholders of the outcome of the Board’s Investment Decision.

Within 30 business days of the NAIF Board making an Investment Decision, NAIF will publish on the NAIF website relevant information about the transaction (subject to commercial confidentiality as required by Section 17(2) of the Investment Mandate).