The Northern Australia Infrastructure Facility’s investment mandate has been updated to tie it more closely to the government’s critical minerals strategy, emissions reduction targets, and ambition to become a renewable energy superpower.
The updated investment mandate follows the federal government’s commitment to earmark $500 million of the Northern Australia Infrastructure Facility (NAIF) for critical minerals infrastructure projects in June 2023.
Tabled in Parliament on Tuesday, the mandate also puts greater emphasis on consultation with other relevant Commonwealth agencies, such as the National Reconstruction Fund Corporation (NRFC) and Clean Energy Finance Corporation (CEFC0, ahead of making investment decisions.
This includes a particular requirement to consider investment opportunities recommended by the Net Zero Economy Agency, if the Facility has engaged with them.
All NAIF investments must be explicitly tied to at least one of five government policy priorities listed in the updated mandate. These include “sustainability, climate change and circular economy principles and solutions in Northern Australia” and “realising the Critical Minerals Strategy”.
There is also an emphasis on sustainable economic development, reducing inequality, and improving the lives of First Nations people and communities in line with the Closing the Gap agreement.
The significance that must be granted to Net Zero Economy Agency investment opportunities is also included in the investment mandate for the NRFC. However, it was not in the CEFC’s investment mandate, which was updated in July 2023.
The Net Zero Economy Agency is currently being established within the Department of Prime Minister and Cabinet as a precursor to a legislated Net Zero Economy Authority.
It is being established to coordinate policy and program design for the transition to a net zero economy, with particular regard to regional areas and workers.
The NAIF will also be expected to consult with the Finance department “on the application of the Australian Government’s Buy Australian Plan to Projects; and where practical, encourage the increased use of local content in Projects”.
Finance minister Katy Gallagher said the updated mandate ensures the NAIF continues to be deployed with high standards for risk and financial management.
“Amendments to the investment mandate strengthen the expectation the NAIF will consult and collaborate with other Australian Government entities, including to support the Net Zero Economy Agency’s role in the transition to net zero emissions,” Senator Gallagher said.
“These changes empower NAIF to continue to leverage and align with national priorities and programs to crowd in investment in the north.”
Since the NAIF was established in July 2016, it has made $4 billion worth of loan investments, of which $655 million has been put towards critical minerals and rare-earth projects. Last financial year alone, the facility approved $491 million in new loans.
Minister for Northern Australia and for Resources Madeleine King described the NAIF as being “at the heart of the Australian Government’s northern Australia agenda”.
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