There are four stages in NAIF’s application and assessment process:
- Enquiry and Preliminary Assessment Stage
- Strategic Assessment Stage
- Due Diligence Stage
- Investment Decision and Execution Stage
NAIF’s Application and Approval procedure is aligned with an infrastructure project lifecycle becoming more rigorous as a project progresses to financial close.
Project proponents are encouraged to contact us as early as possible to discuss their potential project prior to commencing any detailed planning, or submitting, any formal information.
Unless you consent to release, any information you provide us will ordinarily be treated as confidential until an Investment Decision is made, when public disclosure is required. This includes the fact you have approached NAIF for potential support for a project
- Enquiry and Preliminary Assessment
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 NAIF’s mandatory eligibility criteria and other requirements
- any other supporting information which may be available to support the initial enquiry
The enquiry information will allow NAIF to provide feedback to a proponent as they advance 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).
- Strategic Assessment
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 related governance and environmental risks 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, NAIF will provide feedback. 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.
- Due Diligence
Detailed due diligence can commence once the Board has completed its Strategic Assessment, and has decided that NAIF will continue investigating the project. The proponent must submit and Investment Proposal 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, social and related governance 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 risk 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.
- Investment Decision & Execution
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 conditionally on documentation and if it is, the formal Investment Decision will only be made upon the relevant conditions being satisfied and if no objection from the Minister or the relevant State or Territory (refer below). The formal Investment Decision may still remain subject to conditions precedent. If and once a decision is made, NAIF will work with a proponent to finalise the financial assistance arrangements including satisfaction of any conditions precedent.
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).