Northern Australia Infrastructure Facility Investment Mandate Direction 2016
7. Matters to be considered when making 7. Matters to be considered when making Investment Decisions
Start here
Get a plain-English read of 7. Matters to be considered when making
Turn the raw legal text into a practical explanation grounded in Northern Australia Infrastructure Facility Investment Mandate Direction 2016.
7. Matters to be considered when making Investment Decisions
(1) The Facility must not provide a Financing Mechanism unless the Board is satisfied the Project would not otherwise have received sufficient financing from other financiers.
(2) Before making an Investment Decision, the Board must be satisfied:
(a) the Investment Proposal has met all mandatory criteria in Schedule 1 to this Direction; and
(b) there is an expectation that the Commonwealth will be repaid, or that the investment can be refinanced; and
(c) that any return will cover at least the Facility’s administrative costs, and the Commonwealth’s cost of borrowing.
(3) In making an Investment Decision, the Board must have regard to:
(a) whether the Investment Proposal meets any non-mandatory criteria in Schedule 2 to this Direction; and
(b) the extent of any concession that may be offered to a Project Proponent, in accordance with section 9 of this Direction; and
(c) the potential effect of the Project on other infrastructure; and
(d) the potential effect of the Financing Mechanism on the Australian infrastructure financing market; and
(e) the necessity of the investment to encourage private sector participation in financing a Project.
(4) The Board, in making an Investment Decision, must consider a preference for a diversified portfolio, including with respect to industrial and geographic spread across the States and Territory that comprise Northern Australia.
- Discretion
The Board maintains the discretion to decline to offer a Financing Mechanism for an Investment Proposal.
- Determining Concessions
(1) In determining any concession to be granted in an Investment Decision, the Board must have regard to:
(a) the extent and mix of all concessions necessary for the Investment Proposal to proceed; and
(b) the extent of the project’s public benefit.
(2) The Board must limit the concessions offered to the minimum required for the Investment Proposal to proceed.
(3) The Board may propose contract terms to ensure that the Facility is not providing greater concessions than necessary. This may include, but is not limited to:
(a) removing, relaxing or minimising concessions provided; or
(b) having the ability to seek early exit from an investment.