{"id":"F2023L01671","name":"Northern Australia Infrastructure Facility Investment Mandate Direction 2023","slug":"northern-australia-infrastructure-facility-investment-mandate-direction-2023","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":442215,"registerId":"F2023L01671-fast-fetch-1775957273854","compilationNumber":null,"startDate":"2026-04-12","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"1","sectionType":"section","heading":"Northern Australia Infrastructure Facility Investment Mandate Direction 2023","content":"---\nmeta-content-style-type: text/css\nmeta-content-type: application/xhtml+xml; charset=utf-8\n---\n\n?xml version=\"1.0\" encoding=\"utf-8\" standalone=\"no\"?>\n\n\n\n \n\nNorthern Australia Infrastructure Facility Investment Mandate Direction 2023\n\nWe, MADELEINE KING, Minister for Northern Australia, and KATY GALLAGHER, Minister for Finance, give the following Direction under subsection 9(1) of the Northern Australia Infrastructure Facility Act 2016.\n\nDated 8 December 2027 2023 MK\n\n KG\n\nMADELEINE KING KATY GALLAGHER\n\nMinister for Northern Australia Minister for Finance\n\n \n\nContents\n\nPart 1—Preliminary\n\n1 Name\n\n2 Commencement\n\n3 Authority\n\n4 Definitions\n\n5 Repeal\n\n6 Purpose\n\nPart 2—Directions about all Investment Decisions\n\n7 Making Investment Decisions\n\n8 Matters to be considered when making Investment Decisions\n\n9 Discretion................................................4\n\nPart 3—Directions about specific types of Investment Decisions and derivatives\n\n10 Determining loan conditions and concessions\n\n11 Alternative Financing Mechanisms\n\n12 Derivatives\n\n13 Direct funding ............................................6\n\n14 Limits on equity investments\n\nPart 4—Directions about risk, governance and consultation 7\n\n15 Investment risk and monitoring...................................7\n\n16 Consultation with relevant jurisdictions..............................8\n\n17 Relationship with other Commonwealth entities and other persons and bodies\n\n18 Regulatory and environmental approvals\n\n19 Reputation\n\n20 Corporate governance\n\n21 Providing information to the Minister for Northern Australia and Finance Minister\n\n22 Australian industry participation\n\nSchedule 1—Eligibility criteria for financial assistance\n\nSchedule 2—Government policy priorities\n\n \n\nPart 1—Preliminary\n\n1 Name\n\n This Direction is the Northern Australia Infrastructure Facility Investment Mandate Direction 2023.\n\n2 Commencement\n\n This Direction commences the day after it is registered.\n\nNote 1: Section 42 of the Legislation Act 2003, which deals with the disallowance of legislative instruments, does not apply to this Direction (see table item 2 in section 9 of the Legislation (Exemptions and Other Matters) Regulation 2015 and section 44 of the Legislation Act 2003).\n\nNote 2: This Direction is exempt from sunsetting (see table item 3 in Section 11 of the Legislation (Exemptions and Other Matters) Regulation 2015 and section 54 of the Legislation Act 2003).\n\n3 Authority\n\n This Direction is made under subsection 9(1) of the Act.\n\n4 Definitions\n\nNote: A number of expressions used in this instrument are defined in section 5 of the Act, including the following:\n\n(a) consideration period;\n\n(a) Facility;\n\n(b) Finance Minister;\n\n(c) Minister for Northern Australia.\n\n In this instrument:\n\nAct means the Northern Australia Infrastructure Facility Act 2016.\n\nAlternative Financing Mechanism means financial assistance other than financial assistance that is only a loan.\n\nNote 1: Examples of financial assistance that is not a loan include: letters of credit, the purchase of primary-issue bonds, debentures and other debt-like instruments, and equity and equity-like instruments such as ordinary shares, units in trusts, interests in joint ventures, convertible notes and preference shares.\n\nNote 2: If, for example, financial assistance includes both a loan and an equity component, then that financial assistance is not ‘only a loan’, and so is an Alternative Financing Mechanism. \n\nCommercial Financier means a private sector body that provides finance or investment into economic infrastructure projects.\n\nCommonwealth entity has the same meaning as in the Public Governance, Performance and Accountability Act 2013.\n\ndirect assistance has the meaning given by subsection 13(2).\n\nFinance Department means the Department of State of the Commonwealth administered by the Finance Minister.\n\nGovernment Policy Priorities means the Government priorities described in the first column of the table in Schedule 2.\n\nIndian Ocean Territories means the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands.\n\nInfrastructure Australia has the same meaning as in the Infrastructure Australia Act 2008.\n\nInvestment Decision means a decision by the Facility to offer financial assistance for a Project, and includes a decision to offer financial assistance conditional on the negotiation and execution of legal documentation, or on the satisfaction of conditions precedent to funding.\n\nNote: The making of an Investment Decision results in a proposal by the Facility to provide financial assistance, within the meaning of section 11 of the Act.\n\nInvestment Proposal means an application for financial assistance submitted to the Facility.\n\nMandatory Criteria means the mandatory criteria described in Schedule 1.\n\nProject means a project the subject of an Investment Proposal or an Investment Decision.\n\nProject Proponent means the entity responsible for a Project.\n\nRisk Appetite Statement has the meaning given by subsection 15(1).\n\nState includes the Northern Territory.\n\nTarget Portfolio Return has the meaning given by paragraph 14(5)(a).\n\n5 Repeal\n\n The Northern Australia Infrastructure Facility Investment Mandate Direction 2021 is repealed.\n\n6 Purpose\n\n The purpose of this Direction is to direct the Board in relation to the performance of the functions of the Facility.\n\nPart 2—Directions about all Investment Decisions\n\n7 Making Investment Decisions\n\n (1) When the Facility makes a decision not to offer financial assistance, it must notify the Project Proponent of that decision as soon as practicable.\n\n (2) After the Facility has made an Investment Decision, the Facility must as soon as practicable:\n\n (a) if the Minister gives the Facility a rejection notice under subsection 11(4) of the Act—notify the Project Proponent of the rejection notice; or\n\n (b) if the consideration period has expired and no rejection notice was given to the Facility, or if the Facility has received a notice under subsection 11(3A) of the Act—notify the Project Proponent that the Project is proposed to be offered financial assistance and the terms of that financial assistance.\n\n8 Matters to be considered when making Investment Decisions\n\n (1) Before making an Investment Decision, the Facility must take into account such views on the proposed Investment Decision as are notified to the Facility under section 16 and subsections 17(1) and 17(2).\n\n (2) Before making an Investment Decision, the Facility must be satisfied of all of the following matters:\n\n (a) the Investment Proposal meets all applicable Mandatory Criteria;\n\n (b) there is alignment between the Investment Proposal and one or more of the Government Policy Priorities;\n\n (c) the return on any financial assistance provided under the Investment Decision is likely to cover at least the Facility’s administrative costs and the Commonwealth’s cost of borrowing;\n\n (d) the Facility will not be the sole holder of financial risk in the Project;\n\n (e) there is a reasonable allocation of risk for the Project between the Facility and other sources of finance for the Project;\n\n (f) it can appropriately manage the Facility’s risk exposure in the Project, including via methods such as covenants or reporting mechanisms;\n\n (g) the Facility’s risk exposure in the Project, as identified through its due diligence, amounts to an acceptable level of risk in the Project.\n\n (3) Before making an Investment Decision, the Facility must have regard to all of the following matters:\n\n (a) the Risk Appetite Statement;\n\n (b) the extent of any concession that may be offered for the Project, in accordance with section 10 of this Direction;\n\n (c) an appropriate interest rate or target rate of return for the financial assistance to be offered;\n\n (d) the inherent risk of the Project and its capital structure;\n\n (e) the potential effect of the Project on other economic infrastructure;\n\n (f) the potential effect of the investment on the Australian infrastructure financing market;\n\n (g) the potential effect of the investment on the activities of other Commonwealth entities;\n\n (h) the potential of the investment to encourage private sector participation in financing the Project;\n\n (i) the costs and benefits of the Investment Decision as compared with other Investment Proposals the Facility has under consideration;\n\n (j) the advantages of a diversified portfolio of investments, including with respect to industry sector and geographic spread across the jurisdictions that comprise Northern Australia;\n\n (k) the extent to which the Project addresses identified economic infrastructure needs, as noted through Commonwealth, State or Territory assessment processes, pipelines, or priority lists;\n\n (l) the extent to which the Project contributes, or would contribute to, the material improvement to the infrastructure of a region;\n\n (m) the extent to which the Project contributes, or would contribute to, the provision of public benefit to the residents of a region. \n\n9 Discretion\n\n (1) The Facility may at any time before entering into an arrangement to provide financial assistance in relation to an Investment Proposal, decide not to provide financial assistance for that Project.\n\n (2) The Facility may receive and consider Investment Proposals from any sector.\n\n (3) The Facility must notionally set aside $500 million from the amount appropriated by section 41 of the Act to support projects which:\n\n (a) materially contribute to Priority 4 of the Government Policy Priorities; or\n\n (b) contribute to the delivery or operation of a project that satisfies paragraph (a);\n\n and must not use any of that $500 million to support other projects.\n\n (4) To avoid doubt, subsection (3) does not prevent the Facility from using more than $500 million from the amount appropriated by section 41 of the Act to support projects aligned with Priority 4 of the Government Policy Priorities.\n\nPart 3—Directions about specific types of Investment Decisions and derivatives\n\n10 Determining loan conditions and concessions\n\n (1) Loans are to be the primary form of financial assistance considered by the Facility for all Investment Proposals.\n\n (2) Subject to section 13, the Facility may offer loans on non-concessional terms where appropriate.\n\n (3) The Facility must limit concessions offered to the minimum concessions the Facility considers necessary for a Project to proceed.\n\n (4) The Facility must not provide loans on concessional terms unless the Facility has done an assessment, and on the basis of that assessment is satisfied that:\n\n (a) the provision of loans on a concessional basis would be the most appropriate way of achieving a particular public benefit that the Facility is seeking to achieve; and\n\n (b) the level of concessionality is reasonable given the expected economic and public benefit of the investment; and\n\n (c) the concessionality provided is the minimum that would achieve those benefits.\n\n (5) Where the Facility is satisfied of the things mentioned in subsection (4), the Facility may propose loan concessions including but not limited to any or all of the following:\n\n (a) longer loan tenor than offered by Commercial Financiers, not exceeding the longest term of Commonwealth borrowings;\n\n (b) lower interest rates than offered by Commercial Financiers, which must not be lower than the rate at which the Commonwealth borrows;\n\n (c) extended periods of capitalisation of interest beyond construction completion;\n\n (d) deferral of loan repayments or other types of tailored loan repayment schedules;\n\n (e) lower or different fee structures than those offered by Commercial Financiers;\n\n (f) subordination.\n\n (6) When negotiating loan concessions for a Project, the Facility should consider proposing and utilising contract terms or conditions which reduce or remove the concessions over time, or which enable the Facility to seek early exit from an investment, where the Project becomes viable on non-concessional terms.\n\n (7) To avoid doubt, subsections (3)-(6) do not apply in relation to direct assistance for a Project in one or more States. \n\n11 Alternative Financing Mechanisms\n\n (1) The Facility may only offer an Alternative Financing Mechanism for a Project if the Facility is satisfied that, unless an Alternative Financing Mechanism is used, the Project would either:\n\n (a) not proceed; or\n\n (b) would proceed, but the public benefits able to be achieved would be considerably lower than can be achieved with an Alternative Financing Mechanism.\n\n (2) Where the Facility considers an Alternative Financing Mechanism is preferable to a loan, it must give the Minister for Northern Australia, with the proposal notice required under subsection 11(2) of the Act, the following information: \n\n (a) an explanation as to why the Facility considers the Alternative Financing Mechanism is necessary; and\n\n (b) the estimated commercial value of any concession proposed with the Alternative Financing Mechanism; and\n\n (c) an explanation as to alignment between the Alternative Financing Mechanism and the Risk Appetite Statement (see section 15 of this Direction); and\n\n (d) an assessment of any impacts on the appropriation in section 41 of the Act; and\n\n (e) the proposed exit strategy for the Alternative Financing Mechanism.\n\n (3) At no time may the total potential liability under outstanding guarantees exceed the amount of the uncommitted balance of the appropriation in section 41 of the Act.\n\n (4) Criterion 6 in the Mandatory Criteria applies only where the proposed Alternative Financing Mechanism includes equity or an equity‑like investment.\n\n12 Derivatives\n\n The Facility may only acquire a derivative where:\n\n (a) it is a more effective means of achieving an effective hedge than less complex mechanisms; and\n\n (b) the costs of derivative risk are considered and priced into the Alternative Financing Mechanism; and\n\n (c) the counter-party’s credit profile is considered appropriate; and\n\n (d) the expected benefits, financial or otherwise, are sufficient to outweigh the level of risk and associated costs of acquiring a derivative.\n\nNote: The limitations in this section may apply in addition to those in subsection 7(1C) of the Act.\n\n13 Direct funding\n\n (1) The Facility will seek to provide financial assistance primarily through grants of financial assistance to a State.\n\n (2) The Facility may, as a funder of last resort, choose to provide financial assistance to an entity other than a State in accordance with subsection 7(1A) of the Act (direct assistance).\n\n (3) The Facility must consult the Department as soon as practicable on any Investment Proposal which might result in a decision by the Facility to provide direct assistance.\n\n (4) The Facility must not provide direct assistance in relation to a Project in one or more States on a concessional basis.\n\n (5) The Facility may only provide direct assistance if all of the following criteria are met:\n\n (a) for Projects in one or more States—that State or those States support the proposed direct assistance;\n\n (b) the Facility has consulted the responsible Ministers on the proposal to provide direct assistance, and the Facility has considered the views of those Ministers;\n\n (c) the Facility is satisfied the potential returns and benefits of providing the direct assistance significantly outweigh the costs and risks of doing so;\n\n (d) the Facility is satisfied there is no reasonable prospect of the Project proceeding in any form unless direct assistance is provided.\n\n (6) To avoid doubt, this section does not apply to Projects that are solely in the Indian Ocean Territories.\n\n14 Limits on equity investments\n\n (1) The Facility must not provide financial assistance in the form of an equity investment in an entity under subsection 7(1A) of the Act if doing so would result in the Facility or the Commonwealth, or Commonwealth entities either alone or together:\n\n (a) holding a majority of the equity interests in the entity; or\n\n (b) being in a position to control the entity.\n\n (2) Subsection (3) applies if:\n\n (a) the Facility holds one or more equity interests in an entity; and\n\n (b) the Facility becomes aware that holding those equity interests results in the situation referred to in subsection (1).\n\n (3) The Facility must, as soon as reasonably practicable in the circumstances, realise sufficient equity interests so the situation no longer exists.\n\n (4) In this section, control has the same meaning as in the definition of “subsidiary” in the Public Governance, Performance and Accountability Act 2013.\n\n (5) In deciding whether to offer financial assistance in the form of an equity investment, the Facility must:\n\n (a) target a portfolio return for the Facility’s equity or equity-like investments before Facility operating expenses, over the medium to long term, which is at least the five-year Australian Government bond rate plus a premium of 3 per cent per annum (the Target Portfolio Return);\n\n (b) apply all of the Mandatory Criteria except for criterion 4.\n\n (6) Unless exempted by written agreement of the responsible Ministers, the Facility must not make:\n\n (a) Investment Decisions that would result in the Facility providing more than $500 million in equity investments overall; or\n\n (b) an Investment Decision that would result in the Facility providing an equity investment for a Project of less than $5 million or more than $50 million.\n\nPart 4—Directions about risk, governance and consultation\n\n15 Investment risk and monitoring\n\n(1) The Facility must develop a statement outlining the risk strategy that will guide its decisions whether to offer financial assistance for Projects (Risk Appetite Statement).\n\n(2) The Risk Appetite Statement must be developed in consultation with the responsible Ministers, and be approved by the Board.\n\n(3) The Risk Appetite Statement must:\n\n (a) preference a diversified portfolio, including industry and geographic spread across the jurisdictions comprising Northern Australia; and\n\n (b) have a high risk tolerance in relation to factors unique to investing in Northern Australia economic infrastructure, including distance, remoteness and climate; and\n\n (c) consider risks shared between the Facility and the Commonwealth; and\n\n (d) identify and consider climate change-related risks, including increased variability and intensity of weather; and\n\n (e) identify and consider net zero transition risks as new energy technology is commercialised at scale, including potential for assets to become stranded due to industry transition toward clean energy; and\n\n (f) be reviewed at least annually to address emerging risks, changes to existing risks, and changes to Government policy.\n\n (4) In managing its portfolio of investments, the Facility must:\n\n (a) operate with a commercial approach, including by undertaking appropriate due diligence and credit and investment risk assessment processes; and\n\n (b) seek to develop the Facility’s portfolio in a way that seeks to avoid excessive concentration risk (for example, geographical and sectoral concentration); and\n\n (c) periodically review the Facility’s investment and operational practices for the purposes of managing the risk of the Facility’s portfolio over time. \n\n (5) The Facility must actively monitor and manage investment performance, including:\n\n (a) administering each grant of financial assistance with due care and diligence; and\n\n (b) developing and implementing early-warning systems for the identification of emerging issues; and\n\n (c) developing and implementing management plans for each impaired or troubled investment, including, where appropriate, in consultation with the Project Proponent; and\n\n (d) take appropriate action to limit the Facility’s exposure to impaired or troubled assets, for example by enforcing contractual rights or appointing a receiver; and\n\n (e) notifying the responsible Ministers at the time an investment becomes impaired or troubled; and\n\n (f) providing quarterly reports on impaired or troubled investments to the responsible Ministers by 30 September, 31 December, 31 March and 30 June of each year.\n\n (6) The Facility must actively monitor and manage the risks associated with its use of derivatives including through ensuring that:\n\n (a) a derivatives risk policy is in place and is reviewed annually;\n\n (b) appropriate contracts exist between the Facility and counter-parties;\n\n (c) a derivative exposure and risk management report is included in regular reporting; and\n\n (d) the net liabilities under derivatives arrangements at no time exceed the amount of the uncommitted balance of the appropriation in section 41 of the Act.\n\n16 Consultation with relevant jurisdictions\n\n (1) In this section relevant jurisdiction means:\n\n (a) for a Project in one or more States—that State or each of those States;\n\n (b) for a Project in the Indian Ocean Territories—the Commonwealth, as represented by the Department of State of the Commonwealth that deals with the administration of the Indian Ocean Territories.\n\n (c) for a Project in one or more States and in the Indian Ocean Territories—each of that State or those States and the Commonwealth, as represented by the Department of State of the Commonwealth that deals with the administration of the Indian Ocean Territories.\n\n (2) The Facility must commence consultation with each relevant jurisdiction as soon as practicable after receiving an Investment Proposal.\n\n (3) Consultation with a relevant jurisdiction must commence by providing the relevant jurisdiction with a notification of assessment, which includes an outline of the details of the Project and the characteristics and criteria which the Project must satisfy in order for the Facility to offer financial assistance.\n\n (4) The Facility must not make an Investment Decision if at any time a relevant jurisdiction provides written notification that financial assistance should not be provided for the Project.\n\n (5) The Project Proponent is to be informed of a decision not to progress an Investment Proposal within five business days of the Facility receiving written notification from a relevant jurisdiction that financial assistance should not be provided for the Project.\n\n17 Relationship with other Commonwealth entities and other persons and bodies\n\n (1) Before making an Investment Decision, the Facility must, in relation to the proposed Investment Decision, consult:\n\n (a) the Department; and\n\n (b) any other Commonwealth entities or any other person or body the Department notifies the Facility should be consulted.\n\n (2) Where an Investment Decision would provide financial assistance greater than $250 million in aggregate, the Facility must consult Infrastructure Australia in relation to the public benefit analysis of the Project.\n\n (3) The Facility will work with the Department and the Finance Department to ensure that, subject to commercial confidentiality, advice provided to Government addresses the effectiveness of the Facility and its projects in meeting the Government Policy Priorities.\n\n (4) Where it would be practical and appropriate, in the reasonable opinion of the Facility, in order to facilitate the performance of the Facility’s functions, the Facility must seek to cooperate and collaborate with other Commonwealth entities, and with any State entities, that are able to support it in the performance of its functions.\n\n (5) To avoid doubt, subsection (4) does not oblige the Facility to consult any Commonwealth entity or State entity in relation to a project (whether or not the project is the subject of an Investment Proposal or an Investment Decision) either before or after the Facility makes a decision whether to offer financial assistance for the project.\n\n (6) Without limitation, for the purposes of this section, Commonwealth entities include but are not limited to the following:\n\n (a) the Australian Renewable Energy Agency;\n\n (b) the Clean Energy Finance Corporation;\n\n (c) Export Finance Australia;\n\n (d) Housing Australia;\n\n (e) the Regional Investment Corporation;\n\n (f) the National Reconstruction Fund Corporation;\n\n (g) the Net Zero Economy Agency.\n\n (7) For this section, each of the following is a State entity:\n\n (a) a State;\n\n (b) a body corporate established for a public purpose by or under a law of a State.\n\n (8) Where the Net Zero Economy Agency has engaged with the Facility on opportunities that support the transition to net zero emissions, the Facility will consider those opportunities.\n\n18 Regulatory and environmental approvals\n\n The Facility may make an Investment Decision prior to the Project Proponent obtaining all necessary regulatory, environmental and other relevant approvals and arrangements for the Project on such conditions as the Facility considers appropriate.\n\n19 Reputation\n\n The Facility must avoid behaviour of a kind which is likely to bring into disrepute:\n\n (a) the Commonwealth; or\n\n (b) a Commonwealth entity; or\n\n (c) a State; or\n\n (d) an agency or authority of a State.\n\n20 Corporate governance\n\n (1) The Facility must have regard to Australian best practice government governance principles and relevant Australian best practice corporate governance for Commercial Financiers, when performing its functions, including developing and annually reviewing policies with regard to:\n\n (a) environmental issues; and\n\n (b) social issues; and\n\n (c) climate and transition risks; and\n\n (d) shared risk; and\n\n (e) governance issues.\n\n (2) The Facility must, as part of its annual report, report on the non-financial outcomes of its Investment Decisions, including how it has developed or enhanced Northern Australian economic infrastructure, public benefits to the broader economy and community and Indigenous participation.\n\n (3) Within 30 business days of the conclusion of the Minister’s consideration period under section 11 of the Act, for a proposal by the Facility to provide financial assistance, the Facility must publish information regarding the relevant Investment Decision on its website, including (except information subject to commercial confidentiality):\n\n (a) the name of the Project Proponent; and\n\n (b) the nature of investment; and\n\n (c) the Project location; and\n\n (d) the type of financial assistance offered by the Facility; and\n\n (e) the amount of the financial assistance offered by the Facility; and\n\n (f) the description of the public benefit; and\n\n (g) any additional information called for by reporting guidance issued by the Finance Department.\n\n (4) The Facility must publish guidance on its website on:\n\n (a) the format of an Investment Proposal; and\n\n (b) the Facility’s processes for making decisions on whether to offer financial assistance for Projects; and\n\n (c) any other matters it considers necessary.\n\n (5) Within 30 days of an Investment Decision, the Facility must publish a summary of the Project Proponent’s Indigenous Engagement Strategy or, for a project in the Indian Ocean Territories, the Local Employment and Procurement Strategy on its website.\n\n21 Providing information to the Minister for Northern Australia and Finance Minister\n\n (1) The Minister for Northern Australia or the Finance Minister may, at any time, request information from the Facility regarding its policies, Investment Decisions or the management of its portfolio.\n\n (2) The Facility must respond to a request for information from the Minister for Northern Australia or the Finance Minister within 30 days and provide its response to both the Minister for Northern Australia and the Finance Minister.\n\n (3) Each quarter, unless otherwise requested by the Minister for Northern Australia in writing, the Facility must provide a briefing to the responsible Ministers on the status of its Investment Decisions, each project’s performance against any key metrics requested by the Minister for Northern Australia, and delivery against the Government Policy Priorities.\n\n22 Australian industry participation\n\n (1) The Facility must ensure that an Australian Industry Participation plan is completed for any Project for which the Facility provides financial assistance, where required by the Australian Industry Participation Plans and Implementation Reports for Australian Government Projects: SmartForm User Guide for Organisations or the Australian Industry Participation Plans and Implementation Reports in Northern Australia Infrastructure Facility (NAIF) Loans: NAIF User Guide (SmartForm Version).\n\n (2) The Facility must also:\n\n (a) consult with the Finance Department on the application of the Australian Government’s Buy Australian Plan to Projects; and\n\n (b) where practical, encourage the increased use of local content in Projects.\n\n\n\n\nSchedule 1—Eligibility criteria for financial assistance\n\nTo be eligible for financial assistance, the Facility must be satisfied that the Investment Proposal meets all applicable Mandatory Criteria:\n\n| Mandatory Criteria | Description |\n| --- | --- |\n| The Project involves development or enhancement of Northern Australia economic infrastructure. | The Facility must be satisfied the Project incorporates, or will incorporate, the development or enhancement of physical structures, assets (including moveable assets), technology or facilities which underpin, facilitate or are associated with:
(a) the transport or flow of people, goods, services or information; or
(b) the establishment or enhancement of business activity in a region; or
(c) an increase in economic activity in a region, including efficiency in developing or connecting markets; or
(d) an increase in population; or
(e) an increase in existing local workforce availability or capability.
The Project must either bring new capacity online or represent material modernisation which enhances or improves existing capacity.
The Project may involve the Project Proponent:
(a) conducting a program of works over a specified time involving expenditure or procurement for the development or enhancement of economic infrastructure; or
(b) providing financing that facilitates the development or enhancement of economic infrastructure.
The refinancing of existing debt without the creation of new capacity, is ineligible. |\n| 2. The Project will be of public benefit. | The Facility must be satisfied the Project will produce benefits to the broader economy and community beyond an economic return to the Project Proponent. Such benefit could include, but is not limited to:
providing a basis for economic growth in the region or community such as by providing local employment opportunities (especially employment opportunities for Indigenous people), growing regional income, increasing sovereign capability, providing local procurement opportunities (including Indigenous procurement opportunities), or increasing business for local suppliers; orstimulating population growth by improving regional or community access to social infrastructure, for example social or affordable housing, or by increasing regional or community liveability or living standards.
The expected value of the public benefit must exceed the estimated value of any concessions offered. |\n| 3. The Project is located in, or will have a significant benefit for, Northern Australia. | Northern Australia is defined in the Act. It includes all of the Northern Territory, those parts of Queensland and Western Australia above the Tropic of Capricorn, and the Indian Ocean Territories.
It also includes areas intersecting with the Tropic of Capricorn and the regional centres of Gladstone (Queensland), Carnarvon (Western Australia) and Exmouth (Western Australia), as well as the Local Government Areas of Meekatharra, Wiluna and Ngaanyatjarraku which have boundaries intersecting with the Tropic of Capricorn. Territorial seas up to 12 nautical miles offshore adjacent to these areas are also included in the definition.
Projects do not need to be entirely within these boundaries if they produce significant benefits to Northern Australia. For example, a Project enhancing north-south connectivity may be eligible. |\n| 4. For financial assistance in the form of loans—the loan will be able to be repaid, or refinanced. | The Project Proponent must present comprehensive financial modelling to demonstrate the ability of the Project to repay the debt in full and on time, or refinance, based on assumptions and risk profile acceptable to the Facility having regard to the Risk Appetite Statement. |\n| 5. Indigenous Engagement Strategy. | For Projects not solely in the Indian Ocean Territories, the Project Proponent must provide an Indigenous Engagement Strategy which sets out objectives for Indigenous participation, procurement, training and employment to improve outcomes for the Indigenous population in the region of the proposed Project. These objectives should be designed in partnership with local Indigenous people, where feasible and where agreement can reasonably be reached. The Strategy must contain details of Indigenous procurement and employment plans demonstrating a commitment to Indigenous communities.
For Projects not solely in the Indian Ocean Territories, Project Proponents should demonstrate the contribution their Project and its implementation will make to improving outcomes for Indigenous communities.
Project Proponents of Projects taking place largely or entirely within the Indian Ocean Territories must provide a Local Employment and Procurement Strategy, outlining local employment and procurement targets, and the plan to deliver those targets.
The Project Proponent must agree to report regularly, as required by the Facility, on achievements against the objectives set out in its Indigenous Engagement Strategy or Local Employment and Procurement Strategy, including participation, procurement, training and employment outcomes. The Facility must provide guidance to the Project Proponent to ensure reported data can be aggregated across its portfolio of investments. |\n| 6. If an Alternative Financing Mechanism is provided in the form of equity or equity‑like investment, this will generate a return to Government. | The Project Proponent must present comprehensive financial modelling to demonstrate the ability of the Project to meet or exceed the Target Portfolio Return.
Based on its own assessments and modelling provided by the Project Proponent, the Facility must be satisfied there will be opportunities or mechanisms for the Facility to exit or monetise the equity investment within the medium to long term. |\n\n\n \n\n \n\n\n\n\nSchedule 2—Government policy priorities\n\nIn making Investment Decisions, the Facility must be satisfied that the Project aligns with one or more of the Government Policy Priorities. The project descriptions in the right-hand column of the table are hypothetical examples of projects that would be aligned with the Government priority in the same row:\n\n| Government Priority | Project Description |\n| --- | --- |\n| Sustainable and resilient economic development and the alleviation of economic or social disadvantage in Northern Australia | Projects materially improving the infrastructure of a region or local community, or providing public benefit, or improving the resilience of a region.Projects contributing to secure working opportunities and economic growth in Australia’s regional communities.Projects in communities or regions where local workforce participation is low.Projects that contribute to skills expansion and development in regional communities, including through long-term career pathways.Projects which would increase the supply of affordable housing.Projects which advance women’s economic security. |\n| 2. Working with jurisdictions to deliver key infrastructure projects in Northern Australia | Projects which enhance Northern Australia’s electricity transmission system.Projects which enhance Northern Australia’s water infrastructure.Projects which enhance Northern Australia’s transport infrastructure.Projects which enhance Northern Australia’s communications infrastructure and support digital inclusion.Projects which support the required ancillary industries and businesses to support current and future key infrastructure developments.Projects that improve Australia’s manufacturing capability, particularly in vulnerable or strategically important supply chains. |\n| 3. Sustainability, climate change and circular economy principles and solutions in Northern Australia | Projects that contribute to the reduction of Australia’s emissions by 43 per cent by 2030, Australia’s renewable energy target of 82 per cent by 2030, or net zero emissions by 2050.Projects contributing to Australia’s clean energy transformation or renewable energy superpower ambition.Projects that support sustainability and circular economy principles.Projects in communities or regions with economies concentrated on emissions intensive industries, to support diversification.Projects that deliver nature positive outcomes or strengthen climate adaptation and resilience. |\n| 4. Realising the Critical Minerals Strategy 2023-2030. | Projects that develop the critical minerals industry in Australia, including by:
creating diverse, resilient and sustainable supply chains for critical minerals through strong and secure international partnershipsbuilding sovereign capability in critical minerals processingusing Australia’s critical minerals to help become a renewable energy superpowerextracting more value onshore from Australia’s critical mineral resources, creating jobs and economic opportunity, including for regional and First Nations communities. |\n| 5. Materially improving the lives of Indigenous people and communities | Projects which demonstrate alignment with Priority Reforms of the National Agreement on Closing the Gap.Indigenous-led projects, including verified Indigenous controlled and owned businesses.Projects which would produce material improvements in the lives of Indigenous people. |\n\n \n","sortOrder":0}],"analysis":{"flash_summary_failed":{"failed":true,"reason":"A positive credit balance is required for all requests, including BYOK, so fallback providers remain available. Add credits at https://vercel.com/d?to=%2F%5Bteam%5D%2F%7E%2Fai%3Fmodal%3Dtop-up to continue.","source":"analysis-cron"},"flash_summary":{"complexity_score":7,"scope_assessment":{"changed":true,"description":"This Direction refines and re‑targets the Facility’s mandate compared with prior instruments by both narrowing and expanding scope. It narrows financial flexibility by prioritising loans, limiting concessionality, capping equity exposure (overall and per-project) and tying derivative/guarantee exposure to the uncommitted appropriation (s.10, s.14, s.11(3), s.12). At the same time it expands policy targeting and conditionality: it formalises government priorities (Schedule 2), explicitly earmarks $500 million for critical minerals projects (s.9(3)), raises climate and net‑zero transition considerations into the Risk Appetite Statement (s.15(3)(d)-(e)), and strengthens transparency, Indigenous engagement and jurisdictional consultation (Schedule 1; s.16; s.20). These changes shift the Facility from a broader financing backstop toward a more policy‑directed and rule‑constrained investor, increasing targeted support for particular sectors while tightening fiscal and governance guardrails."},"complexity_factors":["Multiple cross-references to the Northern Australia Infrastructure Facility Act 2016 (subsections 9(1), 11(3A), 11(4), 7(1A), 7(1C), section 41) increasing external dependency and legal layering.","Six Mandatory Criteria in Schedule 1 with substantive sub-requirements (e.g. financial modelling, Indigenous Engagement Strategy) that must all be met before eligibility.","Extensive conditional logic in Part 2 and Part 3 (e.g. s.8(2)(a)-(g), s.8(3)(a)-(m), s.10(3)-(6), s.11(1)-(2), s.13(5)(a)-(d)).","Multiple monetary and portfolio caps and thresholds: $500 million notional set‑aside (s.9(3)); equity portfolio cap $500 million (s.14(6)); per-equity-investment floor/ceiling $5M/$50M (s.14(6)); $250 million consultation trigger for Infrastructure Australia (s.17(2)).","Detailed reporting, publication and monitoring requirements with specified timeframes (quarterly reporting on impaired investments, 30-business-day publication windows, 30-day responses to ministerial requests) (s.15(5), s.20, s.21).","Risk governance layering: Risk Appetite Statement with ministerial consultation, annual review, and specific climate/net-zero considerations (s.15(1)-(3)).","Interaction with many named Commonwealth entities for consultation and coordination (s.17(6)), creating operational complexity and potential for overlapping mandates.","Specific financial instrument rules (derivatives, guarantees, alternative financing) with caps tied to uncommitted appropriation and qualitative tests (s.11(3), s.12, s.15(6)).","Repeal and replacement of the prior Direction (s.5) meaning historical practice may need adjustment; directions are exempt from disallowance/sunsetting (Commencement notes), affecting contestability and reviewability. "],"plain_english_summary":"**What this Direction does (mechanics first)**\n\n- Directs the Board of the Northern Australia Infrastructure Facility (the Facility) on how to make decisions to offer financial assistance for projects in Northern Australia (s.3, s.6). The Direction replaces the 2021 mandate (s.5).\n\n- Establishes eligibility and mandatory criteria projects must meet before any financial assistance is offered (Schedule 1; see especially Mandatory Criteria 1–6). Examples include: the project must develop or enhance Northern Australia economic infrastructure, deliver public benefit that exceeds any concession value, and (for loans) demonstrate repayment or refinance capacity.\n\n- Makes loans the default form of assistance and limits concessional (subsidised) loan terms to the minimum necessary to enable a project to proceed (s.10(1), (3)–(6)). Concessions may include longer tenor, lower interest not below Commonwealth borrowing rate, deferred payments, fee changes and subordination (s.10(5)).\n\n- Allows alternative financing (equity, guarantees, bonds, convertible notes and other non-loan instruments) only where the Facility is satisfied the project would not proceed, or would deliver materially less public benefit, without that mechanism (s.11(1)). If using alternatives, the Facility must provide extra information to the Minister (s.11(2)).\n\n- Places limits on equity and equity-like investments: the Facility (and Commonwealth entities together) must not hold a majority or be in a position to control an investee; equity exposure overall is capped (ministerially exemptible) at $500 million; individual equity investments must fall between $5 million and $50 million unless ministers agree otherwise; equity investments must target a portfolio return of 5‑year government bond rate + 3% (s.14(1), (5)–(6)).\n\n- Sets a notional $500 million earmark from the Facility appropriation to support projects aligned with the “Critical Minerals” policy priority (Priority 4 in Schedule 2) and requires that money not be used for other projects (s.9(3)–(4)).\n\n- Requires a Risk Appetite Statement covering portfolio diversification and specific northern‑Australia risks (distance, remoteness, climate variability, net zero transition/stranded‑asset risk). That statement must be developed with ministers and approved by the Board and reviewed at least annually (s.15(1)–(3),(f)).\n\n- Imposes consultation and veto-like constraints with jurisdictions: the Facility must consult the relevant State(s) (or Commonwealth for Indian Ocean Territories) early and must not make an Investment Decision if a relevant jurisdiction provides written notice that assistance should not be provided (s.16(2)–(4)).\n\n- Requires the Facility to consult the Department and other Commonwealth entities before decisions (s.17), to consult Infrastructure Australia on public benefit for projects > $250 million (s.17(2)), and to cooperate with several named agencies when relevant (s.17(6)).\n\n- Lays down transparency, reporting and governance obligations: publish project summaries and Indigenous or local procurement strategies, quarterly and annual reporting on troubled investments, publish decision guidance and formats, and respond to ministerial information requests within 30 days (s.20(2)–(5), s.21).\n\n- Stipulates operational limits on derivatives and guarantees tied to the uncommitted appropriation (s.11(3), s.12, s.15(6)(d)).\n\n\n**Who is directly affected**\n\n- The Facility’s Board and executive (decision‑makers tasked with following these directions).\n- Project proponents (applicants) who must meet Mandatory Criteria, provide financial modelling, Indigenous or local procurement strategies, and accept reporting/monitoring conditions (Schedule 1; s.15(5)).\n- State and Territory governments (consultation rights and possible veto in writing) and the Commonwealth administration for the Indian Ocean Territories (s.16).\n- Private/commercial financiers and investors (loans are prioritised and concessions limited; equity participation by the Facility is capped and targeted) (s.10, s.14).\n- Ministers (Minister for Northern Australia and Finance Minister) who receive briefings, may request information, and are party to developing the Risk Appetite Statement (s.15; s.21).\n- Other Commonwealth agencies named or notified for consultation (e.g. Infrastructure Australia, ARENA, CEFC, Export Finance Australia, Net Zero Economy Agency) (s.17).\n\n\n**Why it matters (official purpose, then practical implications and trade‑offs)**\n\n- Officially: the Direction tells the Board how to apply the Facility’s statutory functions so NAIF investments support government policy priorities (Schedule 2) and meet mandatory eligibility rules (s.6, Schedule 1).\n\n- Practical implications, trade‑offs and incentives:\n - Financial discipline: loans are the default and concessions must be the minimum necessary (s.10). This reduces the likelihood of large, ongoing subsidies from the Facility but still allows targeted concessions when a clear incremental public benefit is demonstrated (s.10(4)).\n - Targeting and concentrated benefit: the Direction earmarks $500 million for critical minerals projects (Priority 4) (s.9(3)). That concentrates funding on a policy goal and creates an incentive for proponents in that space to apply, but it also reduces fungible funding available for other projects in the appropriation (opportunity cost) (s.9(3)).\n - Private finance participation: the Facility must not be the sole financier and must seek reasonable risk sharing (s.8(2)(d)–(e)). This creates pressure for co‑financing and allows commercial financiers to remain active, subject to the Facility’s concessionality rules and portfolio choices.\n - Equity and market signals: equity investments are constrained in size and scope (s.14). That limits the Facility’s role as an owner/operator and preserves market space for private equity and project investors; it also forces exits where the Facility would otherwise gain control (s.14(2)–(3)).\n - State influence and implementation risk: States (or the Commonwealth for the Indian Ocean Territories) have effective blocking power if they notify the Facility in writing that assistance should not be provided (s.16(4)). This protects state interests but can prevent Commonwealth-funded projects proceeding even where the Facility and proponents believe there is public benefit.\n - Compliance and administration costs: proponents must supply detailed financial modelling, Indigenous or local procurement strategies, and accept monitoring and reporting (Schedule 1, s.15(5), s.20). The Facility must run early‑warning systems, monitoring, quarterly reporting on impaired investments, and publication requirements (s.15(5), s.20(2)–(5)). These measures increase administrative workload and compliance costs for both the Facility and proponents.\n - Policy‑driven selection: Schedule 2 sets explicit government priorities (sustainability/climate, infrastructure networks, critical minerals, Indigenous outcomes). These priorities guide selection and effectively privilege projects that align with them, which can reallocate investment compared with a purely commercial selection process.\n - Fiscal guardrails: several provisions (guarantee caps tied to uncommitted appropriation, derivatives limits, requirement that returns cover administrative costs and Commonwealth borrowing cost) constrain fiscal exposure (s.8(2)(c), s.11(3), s.12, s.15(6)). They reduce fiscal risk but may restrict the Facility’s flexibility in high‑risk projects.\n\n\n**Who pays, who decides, and how behaviour changes**\n\n- Who pays: the Facility’s financial assistance is drawn from the Commonwealth appropriation in section 41 of the Act; concessions (below‑market rates, tenure extensions, subordination) are economic costs borne by the Commonwealth (s.9(3); s.10(5); s.11(3)).\n- Who decides: the Facility (its Board and management) makes Investment Decisions but must follow these mandatory directions, consult jurisdictions and Commonwealth entities, and provide notices and reports to responsible Ministers (s.7–8; s.16–17; s.21).\n- Expected behaviour changes:\n - Proponents will need stronger repayment modelling, Indigenous/local strategies, and early State engagement to clear the eligibility and consultation steps (Schedule 1; s.16).\n - Projects aimed at Critical Minerals (Priority 4) gain a funding incentive from the notional set‑aside (s.9(3)).\n - The Facility will prefer to structure assistance as loans with limited concessionality and to seek co‑financing (s.10; s.8(2)(d)).\n\n\n**Implementation risks and administrative discretion**\n\n- The Direction grants the Facility significant discretion within guardrails (e.g. deciding minimum necessary concessions, determining ‘‘reasonable’’ allocation of risk, assessing public benefit and acceptable risk levels) — these are judgement calls that drive outcomes (s.8(2)(c)–(g); s.10(3)–(6)).\n- State written objections can stop projects (s.16(4)) and Ministers have oversight through information requests and the requirement to develop the Risk Appetite Statement with ministers (s.15; s.21). These political and intergovernmental checkpoints create implementation risk and may slow timelines.\n- Monitoring obligations and prescribed early‑warning systems raise administrative burden for the Facility and impose ongoing reporting obligations on Project Proponents (s.15(5); s.20(2)–(5)).\n\n\n**Concise takeaway**\n\nThis Direction tightens how the Facility must operate: prioritise loans, limit concessions, require robust financial modelling and Indigenous/local engagement, earmark funds for critical minerals, cap equity exposure, require States’ early consultation (including an effective veto), and document climate and transition risks in a minister‑approved Risk Appetite Statement. The measure shifts the Facility toward a rule‑based, policy‑targeted financier with fiscal guardrails and increased transparency, at the cost of added compliance, intergovernmental checkpoints, and concentrated funding for selected priorities (see s.8, s.9, s.10, s.11, s.14, s.15, Schedule 1, Schedule 2)."},"kimi_summary":{"content_quality":"ok","complexity_score":6,"scope_assessment":{"changed":false,"description":"This direction aligns with the original purpose of the NAIF Act 2016, which was always intended to provide flexible financing for Northern Australian infrastructure with ministerial oversight. The 2023 update refines operational details—adding climate risk considerations, critical minerals priorities, and tightening equity limits—but does not expand beyond the Act's original scope of infrastructure financing in Northern Australia."},"complexity_factors":["Extensive cross-referencing to the Northern Australia Infrastructure Facility Act 2016 (the 'Act') and other legislation including the Public Governance, Performance and Accountability Act 2013 and Infrastructure Australia Act 2008","Multiple conditional exceptions and carve-outs (e.g., sections 10(7) and 13(6) explicitly exclude Indian Ocean Territories from certain restrictions; section 13(4) prohibits concessions for direct assistance to States but section 10 allows concessions for loans generally)","Nested requirements for decision-making: six mandatory criteria in Schedule 1, five government policy priorities in Schedule 2, plus 13 additional matters to 'have regard to' in section 8(3), creating layered compliance obligations","Sophisticated financial instruments regulated: loans, Alternative Financing Mechanisms (equity, bonds, convertible notes, etc.), derivatives, and guarantees, each with specific constraints","Quantitative thresholds with conditional overrides: $500m cap on total equity investments and $5m-$50m range per equity investment (section 14(6)), but ministers can exempt; $500m set-aside for Priority 4 (critical minerals) with explicit permission to exceed (section 9(4))","Dual ministerial oversight requiring consultation with and reporting to both the Minister for Northern Australia and the Finance Minister throughout","Geographic complexity with differential treatment of States, Northern Territory, and Indian Ocean Territories across multiple sections"],"plain_english_summary":"This ministerial direction tells the Northern Australia Infrastructure Facility (NAIF) how to prioritise and approve infrastructure finance across Northern Australia, requiring loans first, strict public-benefit and Indigenous participation tests, and alignment with national priorities (including a $500m reserve for critical minerals). It limits NAIF control of companies, mandates climate-aware risk management, state consultation (and veto), and public reporting. It matters because it shapes which projects get taxpayer-backed finance and ensures commercial discipline, transparency and national policy alignment."}},"importantCases":[],"_links":{"self":"/api/acts/northern-australia-infrastructure-facility-investment-mandate-direction-2023","history":"/api/acts/northern-australia-infrastructure-facility-investment-mandate-direction-2023/history","analysis":"/api/acts/northern-australia-infrastructure-facility-investment-mandate-direction-2023/analysis","conflicts":"/api/acts/northern-australia-infrastructure-facility-investment-mandate-direction-2023/conflicts","importantCases":"/api/acts/northern-australia-infrastructure-facility-investment-mandate-direction-2023/important-cases","documents":"/api/acts/northern-australia-infrastructure-facility-investment-mandate-direction-2023/documents"}}