First Nations businesses have been supported with more than $1 billion worth of contracts through a nation-wide bond program.
The Indigenous Business Australia (IBA) Performance Bond Trust was set up to assist Aboriginal and Torres Strait Islander businesses by issuing bonds directly to the buyer, in cases where the business may not have the required level of security to provide a bond facility for their contracts.
Since inception in 2018, IBA has issued over 500 performance bonds valued at almost $60 million, and supported contracts valued at over $1 billion.
The IBA said this was a substantial increase since 2020 when, after two years, IBA had supported over 170 bonds worth $12 million, and contracts valued at nearly $202 million.
Performance bonds are issued to the beneficiary of a contract as security against the other party being unable to meet obligations specified in the contract.
Banks often require a 100 percent cash deposit as security for the bond, which ties up considerable amounts of working capital.
The bond partnership that pushed the contract value to over $1 billion was through Mine Power Solutions, an Indigenous-owned and managed diversified construction, mining and electrical contractor which has been successful in winning contracts at Olympic Dam in South Australia.
IBA CEO Kirsty Moore said the Trust had assisted First Nations contractors across the country to participate in a wide variety of contracts including mining, civil works, construction, facility upgrades and renewable energy construction by guaranteeing their capacity to complete projects while requiring minimal security.
“We’re extremely proud of this milestone figure – it ultimately contributes to Aboriginal and Torres Strait Islander business growth which is positive for everyone.”
Find out more about IBA Performance Bonds.
