Department of Commerce, Community, & Economic Development - Alaska Industrial Development & Export Authority
Promote, develop, and advance economic growth and diversification in Alaska by providing various means of financing and investment.
- Finance and/or develop commercial, industrial and infrastructure projects to create jobs, grow the economy, and promote resource development in Alaska. Provide predictability to commercial borrowers to allow job growth and continually expanding economy.
- Manage AIDEA's portfolio for best growth of net asset balance while maintaining positive credit ratings.
- Provide long-term financing, and/or refinancing, to Alaskan businesses for new or existing projects, and provide conduit financing for taxable or tax-exempt bonds for Alaskan organizations.
|Mission Results||Core Services|
|A: Result - Promote economic growth in Alaska.|
|A1: Core Service - Finance and/or develop commercial, industrial and infrastructure projects to create jobs, grow the economy, and promote resource development in Alaska. Provide predictability to commercial borrowers to allow job growth and continually expanding economy.|
Target #2: Create, or retain, 400 construction jobs annually through the Project Development and Commercial Finance programs.
Analysis of results and challenges: AIDEA uses job creation as one of the measures of its success, and considers it important to distinguish permanent jobs from construction jobs. Construction jobs may be short-term by nature, but they are an important factor in the measurement of economic activity. AIDEA includes both pre-construction and construction jobs into this category. Pre-construction jobs include activities such as design, engineering, and permitting. In FY2019, AIDEA saw an uptick in construction activity compared with the previous two years, a sign of growing confidence in the economy. During FY2019, AIDEA financings supported the creation of 415 construction jobs.
|A2: Core Service - Manage AIDEA's portfolio for best growth of net asset balance while maintaining positive credit ratings.|
Target #1: Manage AIDEA's Development Project portfolio for best growth of net asset balance.
Analysis of results and challenges: AIDEA actively supports economic diversity, job creation, and resource development through Project and Infrastructure Development programs. AIDEA pursues the development of intermodal transportation systems, including roads, rail, and ports, to help reduce the cost of getting Alaska’s resources to market. Additionally, AIDEA has been working to develop infrastructure to reduce the cost of energy throughout Alaska. Through the use of Public-Private Partnerships, AIDEA has been co-investing with the private sector to build the infrastructure needed to develop Alaska’s natural resources.
Target #2: Maintain sufficient liquidity to meet bond covenants, fund project investments and fund new loans. A target of building liquidity to support Alaska projects, pay an annual dividend to the State general fund, and allow AIDEA to function.
Analysis of results and challenges: AIDEA’s Revolving Fund Cash and Investments compared to General Obligation Debt communicates to the market that AIDEA has more than sufficient debt service coverage. This operationally driven liquidity enables AIDEA to meet its financing goals because the high cash ratio increases AIDEA’s capacity for project investment and new loan fundings.
|A3: Core Service - Provide long-term financing, and/or refinancing, to Alaskan businesses for new or existing projects, and provide conduit financing for taxable or tax-exempt bonds for Alaskan organizations.|
Target #1: Issue $35 million in new loans each year.
Analysis of results and challenges: The past few years have shown steady use of the AIDEA Loan Participation program by the State’s commercial lenders. The commercial real estate market has been stable for the last several years. If oil prices remain at current levels, there is the possibility of a slowing economic environment. Decisions on the state budget deficit may also impact the commercial real estate market in the future. Lenders are currently highly liquid and the low interest rate environment is assisting in stabilizing demand.
The significant increase in new loans approved during FY2019 is caused by the low interest rate environment and clients’ needs to stabilize their debt service requirements over time. This program will continue to allow the statewide business base to expand, allowing job growth and steadily increasing assessed values so long as the AIDEA Revolving Fund continues to grow apace.
Target #2: Maintain Revolving Fund loan portfolio delinquency rate lower than 3% of the outstanding balance.
Analysis of results and challenges: AIDEA consistently manages the challenge of making good financing decisions while providing financing to support economic growth in Alaska.
Current as of December 9, 2019