The Commonwealth Government's proposed Northern Australia Infrastructure Facility (NAIF) is a significant opportunity for the construction industry to obtain financing to develop projects in Northern Australia.

On 9 November 2015, the Commonwealth Government released its first consultation paper regarding the scheme. This initiative is expected to come into operation in June 2016 and will offer $5 billion in concessional loans for infrastructure projects in Northern Australia. Interested parties have until 30 November 2015 to provide comments on the scheme.

Policy background

In recent years the Commonwealth Government has taken an increasing interest in the economic development of Northern Australia. The NAIF forms a core aspect of the Commonwealth Government's strategy to partner with both the private sector and State Governments to develop major projects in the region. Pertinently, Northern Australia region represents an area of significant economic potential. However, the region's economic development has traditionally been burdened by a low level of infrastructure investment.

Earlier this year, in order to address this, the Commonwealth Government released a white paper "Our North: Our Future Developing Northern Australia", and has identified more than 180 pressing infrastructure needs within the region. In this context, the intention of the NAIF is to precipitate development and "fill gaps" in the infrastructure financing market for Northern Australia. The consultation paper identifies a particular interest in developing the region's airports, communications, rail, ports and roads. This scheme therefore represents a significant opportunity for interested parties to be involved in the coming major infrastructure development in the region.

Proposed structure of NAIF

In order to fulfil this objective the Commonwealth Government will establish an independent statutory board (Board) to negotiate the concessional loans. The Board will consider projected projects on a rolling basis and loans are to be negotiated on a case by case basis. The NAIF is expected to provide standard commercial loans but has indicated that concessions may be made in order to provide sufficient commercial flexibility. The Commonwealth Government expects that at the earliest the first loan will able to be drawn from 1 July 2016.

Eligibility criteria

In order to qualify for a loan under the scheme interested parties must satisfy the Board that the proposed project involves the construction of infrastructure that will provide a public benefit to Northern Australia and would otherwise be unlikely to proceed. Furthermore, the projected projects must be financed by a majority of private funding and the board must be satisfied that applicants are capable of repaying any loans made by the NAIF.

The Commonwealth Government has also indicated that the NAIF aims to preference projects that are seeking to address an identified infrastructure need and have been endorsed by a State or Territory Government. In addition, the Government's intention is that preference will be given to projects loans seeking a loan from the NAIF of $50 million or more.


Public consultation on the loan structure and the eligibility requirements concludes on 30 November 2015. The Government expects that the relevant legislation will enter the Federal Parliament in the first quarter of 2016. The first loans are expected to be drawn at the earliest from July 2016.