Key phrases or definitions relating to the Regional Infrastructure Fund

Hard infrastructure

Hard infrastructure the Regional Infrastructure Fund (RIF) might invest in includes the physical structures and systems that support a region to function and thrive. This could range from energy generation and transportation hubs to manufacturing centres and mining operations.

Resilience infrastructure

This category supports projects that improves a regions’ ability to absorb, adapt and/or respond to stresses and shocks. Investments will improve resilience in areas such as weather events, energy security, water security, food security, connectivity, and recovery infrastructure.

Enabling infrastructure

These projects will support growth by ensuring regions are well-connected and productive. These projects will invest in assets used by, and/or generate benefits for, multiple businesses or many parts of a community. An example includes shared services such as innovation parks or supply chain solutions.

Application

An application is a formal request for funding from the RIF. A template is provided by Kānoa – RD for applicants to complete and requires an applicant to submit project information, detailed financial and other relevant information about their entity to help Kānoa – RD assess an application against the eligibility criteria, and to conduct standard due diligence.

Regional Development Ministerial Group

The Regional Development Ministerial Group (RDMG) will make decisions regarding loan and equity investments up to $35 million and grants over $3 million.

This group is made up of the following Ministers:

• The Minister of Finance
• The Minister of Infrastructure
• The Minister of Local Government
• The Minister for Māori Development
• The Minister for Regional Development

Cabinet will make any RIF investment decisions over $35 million.

Regional priorities

To be eligible for the RIF, projects will need to outline how their proposal aligns with regional priorities. Current regional priorities can be found on the eligibility page – these may change over time.

Eligibility for the Regional Infrastructure Fund

Loan

A loan is a transfer of money by one party to another with an agreement to pay it back on terms and within a contracted period of time. Loans used in the RIF will typically be commercial loans but in some circumstances concessionary loans:

• Commercial loans: a loan established with an interest rate expected to be offered on the market for the project in question.
• Concessionary loans: a loan established with an interest rate lower than a rate expected to be offered on the market for the project in question.

Equity investment

An equity investment will involve the Crown through its Schedule 4A holding company, Crown Regional Holdings Limited acquiring a share/shares in an applicant’s business. The shareholding will provide the Crown with certain rights, including the right to vote on resolutions and receive distributions and to sell the share/s when certain milestones are met.

Co-funding

Co-funding refers to the funding contribution to the project that is not being sought/provided from the RIF. Co-funding and the RIF funding sought/provided should make up the total cost of the project. The levels of co-funding will be agreed in the funding contract.

Grants

Grants is a form of funding that will be available to accelerate projects that would not have a viable source of repayment and would otherwise not progress, particularly for certain categories of Resilience Infrastructure projects. Grants will be rare.
 
There is a preference for the use of loans and equity in the RIF, as grants don’t provide assets to the Crown’s balance sheet.