The $3.8 billion funding injection into EFIC's National Interest Account is more than 77 times the amount it spent on the entire account last year, a $49.2 million loan to OneSteel Manufacturing to upgrade existing iron ore mines in Whyalla. According to EFIC's latest annual report, loans in the national interest category include: "financial commitments which are too large for our balance sheet and risks which we consider are too high for us to prudently accept on our commercial account." The multibillion-dollar boost to the rarely used category is more than four times the exposure of all of EFIC's loans in the national interest category since it began three decades ago.

The loans, now worth up to $716 million, are usually reserved for sovereign countries or their agencies, and while risks have to be disclosed, the loans do not have to pass EFIC's rigorous environmental and social risk evaluations and are approved at the discretion of Trade Minister Steve Ciobo. "The minister can direct us to enter into a facility, or give approval for us to enter into a facility, if the minister believes it is in the ‘national interest’ to do so," its guidelines state. The largest current loan on the account is $300 million to an ExxonMobil-led liquefied natural gas project in the Southern Highlands of Papua New Guinea. Prime Minister Malcolm Turnbull visits Thales Defence Exports this week. Credit:Ben Rushton It also holds a $122.2 million debt with the Indonesian government, more than $10.3 million with the Egyptian administration and four 30-year-old loans with the Cuban National Bank that do not have to be repaid for another two decades.

The loans, which Australian taxpayers have to repay if the countries or companies default, will now be opened up to arms manufacturers in a deal that is worth more than 10 times the amount loaned to the entire LNG industry. In a blow to public accountability, decisions over the taxpayer-funded loans to arms manufacturers will not face normal levels of scrutiny as the agency is partially exempt from the freedom of information act. "The partial exemption and the strong secrecy obligation imposed on us recognises the need to keep confidential the commercial information that we obtain from Australian exporters and investors," its guidelines state. "The partial exemption and the strong secrecy obligation imposed on us recognises the need to keep confidential the commercial information that we obtain from Australian exporters and investors," its guidelines state. The shift to the agency's role in promoting Australia as a global arms manufacturer comes after Trade Minister Steve Ciobo also explored the option of using EFIC to provide taxpayer funding for the embattled Adani coal mine, following a refusal from banks to provide loans to the coal sector.

Loading The agency has previously been criticised for providing loans worth hundred of thousands of dollars to export companies that later entered into voluntary administration, including a $1.5 million guarantee to Precision Catering & Equipment, a $200,000 loan to lean energy and a $300,000 taxpayer loan for a children's hermit crab adoption scheme. An EFIC spokesman said the agency had deep experience in complex, large scale project financing and would draw on its financing of the PNG LNG and the Oyu Tolgoi project in Mongolia to manage new exposures under the new initiative. "EFIC applies its rigorous evaluation of environmental and social risks to loans made on the National Interest Account," he said. A spokesman for Trade Minister Steve Ciobo referred questions to EFIC.