Document ID: chunk:federal_register_of_legislation:F2023L01671:clause:2_10
Version: federal_register_of_legislation:F2023L01671
Segment Type: clause
Provision Reference: sch 2 cl 10
Character Range: 9898–11990

10  Determining loan conditions and concessions
 (1) Loans are to be the primary form of financial assistance considered by the Facility for all Investment Proposals.
 (2) Subject to section 13, the Facility may offer loans on non-concessional terms where appropriate.
 (3) The Facility must limit concessions offered to the minimum concessions the Facility considers necessary for a Project to proceed.
 (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:
 (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
 (b) the level of concessionality is reasonable given the expected economic and public benefit of the investment; and
 (c) the concessionality provided is the minimum that would achieve those benefits.
 (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:
 (a) longer loan tenor than offered by Commercial Financiers, not exceeding the longest term of Commonwealth borrowings;
 (b) lower interest rates than offered by Commercial Financiers, which must not be lower than the rate at which the Commonwealth borrows;
 (c) extended periods of capitalisation of interest beyond construction completion;
 (d) deferral of loan repayments or other types of tailored loan repayment schedules;
 (e) lower or different fee structures than those offered by Commercial Financiers;
 (f) subordination.
 (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.
 (7) To avoid doubt, subsections (3)-(6) do not apply in relation to direct assistance for a Project in one or more States.