COMMENTARY — AIDEA commited to prosperity of Last Frontier

The Alaska Industrial Development & Export Authority (AIDEA) is a government agency whose mission is to promote, develop and advance the economic potential of the 49th state, as well as relieve unemployment in the region.

AIDEA does this by financing or facilitating industrial (including mining), manufacturing, export and business enterprises within the state.

AIDEA offers two financial assistance programs;

* Loan Participation– Working through financial institutions, AIDEA contributes up to 80% in permanent financing for business enterprises.

Borrowers apply at a bank for a loan, and the bank, in turn, applies to AIDEA. The bank attains a minimum 20% share in the loan. Participation of AIDEA is limited to $10 million. Certain small manufacturing and other facilities may qualify for tax-exempt financing under this program.

* Development Finance — Established by the state legislature in 1986, AIDEA can, with this program, develop, own and operate basic installations and facilities within the state — specifically those that advance the prosperity of the region. Roads, ports, airports, utilities and other public facilities are considered eligible projects.

Today, AIDEA owns five projects, ranging from the road and port at Cominco’s Red Dog mine in northwestern Alaska to the Skagway Ore Terminal.

The Skagway Terminal, purchased in 1990, is close to the mineral-rich regions of northern British Columbia and the Yukon. It is, at present, being used by Anvil Mining, owner of the Faro mine in the Yukon, which is expected to produce 500,000 tons of lead and zinc per year and employ 400 when fully operational.

In return for using the terminal, Anvil Range pays US$2.6 million per year to AIDEA for seven years (with two 7-year options for extension). Anvil Range is using 75% of the terminal’s capacity, and AIDEA reserves the right to lease the remainder to another mining operation.

If a mining-related company is interested in applying for financial assistance under this program, it is required to submit information regarding the scope and characteristics of its project to AIDEA for review. AIDEA will then determine whether the project is eligible to receive its participation.

Criteria for eligibility include the following:

* The project and its development must be shown to offer economic advantages to Alaskans.

* The applicant must be shown to be financially responsible.

* The project must be shown to be economically feasible, and capable of producing revenue adequate to repay the bonds or loans with which it is financed.

* The project must provide a quantity of jobs reasonably related to the amount of the financing received by AIDEA.

After AIDEA and the project sponsor have determined that a project qualifies under this program, bonding authorization may be required by the Alaska legislature.

— The author is the project manager for AIDEA.