NAIF fund faces uncertain future despite Government plan to fast-track projects
Humpty Doo Barramundi is the largest producer of farmed barramundi in Australia (ABC News: Michael Donnelly)
A barramundi farm outside Darwin has become just the second project to be offered a loan from the Federal Government’s Northern Australia Infrastructure Facility loan fund.
- Barramundi farm gets second project loan from $5 billion fund
- Commonwealth hopes relaxed rules will revive NAIF fund
- Canavan keeping up pressure on states about fracking
Humpty Doo Barramundi will use a $7 million loan, along with another promised $22 million, for an expansion that would increase its production of 3,000 tonnes of fish per year by 30 per cent.
“This is the first stage of a five-year program. We’re looking at increasing direct employment from 50 to cover 100 people,” the farm’s owner Dan Richards said.
Before the Government relaxed lending rules last month, the $5 billion fund had only made one other loan — $16 million to a Western Australian marine supply base project in Onslow.
That has put the Federal Government under pressure to deliver on one of its key plans for developing the north.
“The NAIF does need to make loans, it’s got a clear objective in the act to help stimulate economic and population growth in Northern Australia and I can only do that by making investments like this one today,” said Matt Canavan, the Federal Minister for Northern Australia.
“The NAIF has said publicly that they’re hopeful of projects of just under $500 million by mid this year, and maybe around a billion dollars by the end of this year.
“That would help to put us basically on track.”
Expanding the Humpty Doo Barra Farm will be NAIF’s first investment in the NT (ABC News: Michael Donnelly)
Lending changes helped NT farm
The Minister said he was hopeful there would be more projects funded from a “strong pipeline” following the lending rule changes.
These include allowing the NAIF to fund 100 per cent of a project’s total debt, and broadening the definition of infrastructure that can be funded to include supplies services and facilities, which are essential to establishing businesses in remote regions.
Under the old rules, only 50 per cent of infrastructure costs could be covered by a NAIF loan, but now it can fund 100 per cent.
That allowed the barramundi farm to qualify for a loan to fund a new nursery shed, feed storage shed and a solar farm.
It will borrow the money for the equipment to put into them from its bank.
“This project wouldn’t have happened but for the changes the Government recently made to the NAIF’s investment mandate, and I’m hopeful we’ll get more projects like this coming forward,” Minister Canavan said.
Other Northern Territory projects hoping for approval include a Darwin Airport-planned solar farm.
Senator Matt Canavan and Chief Minister Michael Gunner at the $7 million announcement (ABC News: Michael Donnelly)
NAIF review planned
But there is uncertainty about the fund’s long-term future.
“I think its just too early say what might happen in three of four years time, we’ll have a review of the NAIF starting later this year,” Mr Canavan said.
The Northern Territory Government is already planning to axe its $200 million infrastructure fund, gained from the sale of TIO, because it hasn’t funded any projects.
“If it’s not doing those things, then we have to find other ways to support economic projects,” Chief Minister Michael Gunner said.
The Territory Government would first have to persuade the fund’s independent board to agree to allow the Government to use the money to fund economic projects in other ways.
Minister Canavan denied the Northern Territory was the easiest target, as a deeply cash-strapped jurisdiction, to pressure into lifting its fracking moratorium as a way of developing the north.
“It’s not true to say that the Australian Government is not putting equivalent pressure, or equivalent persuasion on our state and territory colleagues to try and progress things,” he said.
Mr Gunner denied there is any continued political fallout from the fracking decision, which has been unpopular with a majority of the public and the NT Labor Party.
“I am actually really happy about how the team handled what was a big decision. There is no disunity in the caucus,” he said.
A solar farm and fish nursery will be constructed under the expansion. (ABC News: Michael Donnelly)