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Indigenous Business Australia (IBA) is delighted to announce that more than $1 billion in contracts have now been supported through the IBA Performance Bond Trust. This milestone achievement for Aboriginal and Torres Strait Islander success has continued to grow since the bonds were introduced in 2018.
Since inception, IBA now supports over 500 performance bonds valued at almost $60 million with contracts valued at over $1 billion. 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 per cent cash deposit as security for the bond, which ties up considerable amounts of working capital.
IBA assists 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.
The bond partnership that took the contract’s 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.
Cameron Buzzacott, Managing Director of Mine Power Solutions, is a long-standing IBA customer being the initial performance bond customer through one of his other ventures, Zancott Knight. He says:
“In mid-2018, Zancott Knight strategically decided to collaborate with IBA, transitioning away from our traditional banking institutions for bond requirements.
“Being IBA’s first client, this bond was pivotal for both companies. For Zancott Knight, it was a turning point as it not only streamlined the process of bond origination but also freed up working capital to grow our business.”
IBA CEO Kirsty Moore says, “IBA’s Performance Bond Trust has 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.”
Cameron agrees. He adds, “This growth has strengthened our market presence and allowed us to seize new opportunities and execute more projects, enabling Zancott Knight to navigate the competitive landscape with confidence and agility.
“We are honoured to have partnered on two major milestones, from the first bond in 2018 with Zancott Knight to the bond with MPS that tipped the $1 billion threshold in 2024.”
The Performance Bond Trust is administered by IBA who provide bonds directly to an Indigenous-owned business or alternatively provide capital to enable the business to secure a bond from a mainstream bank. When kicked off in 2018, IBA co-invested $10 million in the facility along with National Indigenous Australians Agency (NIAA) matching a further $10 million.
Find out more about IBA Performance Bonds.
Media contact: Tara Toohill 02 9207 6362 or tara.toohill@iba.gov.au
