Embedded Infrastructure

Embedded Infrastructure

Investment challenge:

  • Projects which are not standalone infrastructure, but have infrastructure components
  • These type of assets may be higher risk than standalone projects, with more limited private sector financing market

NAIF’s value:

  • NAIF can contribute its finance to mixed projects, and the Board may, on a case by case basis, take repayment risk on the total revenues of the asset, rather than segregate revenues for use of only the infrastructure component
  • NAIF can support infrastructure component which a proponent requires being made available to multiple users (eg training facilities)
  • In each case, NAIF’s loan assists in creating opportunities for growth across a number of businesses in a region

Public benefit:

  • Multi user facilities that help overcome the disadvantages associated with being the first mover in an area and encourage the sharing or co-operative use of assets
  • NAIF involvement could assist projects which are relatively new industries or are entering into new markets which are less supported by the private sector
  • Costs can be defrayed or scale developed through co-sharing arrangements