A $5 billion fund that promised to turn northern Australia into an economic powerhouse has spent less than $40 million in its first four years, and none of the money has landed in Queensland.

Key points: Only $38.5 million has been spent on three projects since the $5 billion Northern Australia Infrastructure Facility was established in 2015

Only $38.5 million has been spent on three projects since the $5 billion Northern Australia Infrastructure Facility was established in 2015 Senator Matt Canavan says more than $1.4 billion in loans have been approved, but much of that has not been spent

Senator Matt Canavan says more than $1.4 billion in loans have been approved, but much of that has not been spent Stakeholders are calling for grants under the scheme and an extension of the deadline to apply

Just three projects have received funding from the controversial Northern Australia Infrastructure Facility (NAIF), which was established in 2015 under Tony Abbott.

The scheme put aside $5 billion for concessional loans to help grow private infrastructure projects in the nation's north.

But only a fraction of that money — $38.5 million — has been spent, according to figures released by Queensland Senator Matt Canavan yesterday.

Shadow Minister for Northern Australia, Senator Murray Watt, said it would take the government 500 years to distribute all the money at its current rate.

"I think that's a shocking indictment on this government's ability to get infrastructure projects happening, get jobs created, and get the economy right across northern Australia, including far-north Queensland, going," Senator Watt said.

'Not much incentive' for companies to apply

NAIF said it had approved more than $1.4 billion in loans to 14 infrastructure projects across northern Australia, including $781 million for projects in Queensland.

These include Genex Power's pumped storage hydro project and an expansion of Townsville's airport terminal.

But Senator Watt said the money had been slow to be spent on actual projects.

"You don't create jobs with these projects until the Government actually releases the money, so the companies can get on and start building things and employing people," he said.

Queensland Labor Senator Murray Watt says the $5 billion fund would take 500 years to distribute at the current rate. ( ABC News: Marco Catalano )

Advance Cairns CEO Nick Trompf said the figures were surprising.

"It's a relatively small amount of money to have landed in terms of actual impact," he said.

Mr Trompf said the incentive to apply for a NAIF concessional loan was not strong when interest rates were already low.

"I am aware of a number of applications from the Cairns region that have been looked at and then not pursued, principally because the benefits in a low interest rate environment are relatively marginal," he said.

Industry wants grant money, not loans

Mr Trompf called for the fund to allow grants of up to 50 per cent for eligible projects.

"If you brought grant funding to the table as well as a loan facility you would see a very rapid take up," he said.

"That would turbo-charge NAIF, I have no doubt."

He also called for the application period, which ends in June 2021, to be extended for another five years.

"Clearly they're not going to be getting all the money out the door in that time," he said.

Inquiry into Northern Australia holds hope for reform

Others have called for similar changes in submissions to an inquiry on the effectiveness of the Australian Government's Northern Australia agenda.

Djarindjin Aboriginal Corporation, based 200 kilometres north of Broome in Western Australia, wants to develop a new airport to service the local community and oil and gas companies.

The organisation said securing grant money was crucial to realising its economic goals.

"We are owned by our community and we are trying to lift our whole community out of poverty," it said.

"There is limited appetite to give away any ownership stake in our most significant business asset, and potentially lose the once-in-a-lifetime opportunity to shift the economic outcome for our whole community."

The NAIF has attracted some controversial applicants.

Mining company Adani applied for a $1 billion loan from the NAIF to build its Carmichael coal mine in the Galilee Basin, but the application was vetoed by Queensland Premier Annastacia Palaszczuk.

Genex Power's pumped hydro project at the old Kingston gold mine site is one of four projects in Queensland that has been approved for NIAF funding. ( Supplied: Genex Power )

Isaac Regional Council Mayor Anne Baker wanted the NAIF reviewed so companies could seize on mining potential in her region.

"There are not a lot of approvals that we've seen," she said.

"We do know and agree that there doesn't seem to be a lot of spend and we need to be very seriously looking at it and talking about it."

Submissions to the inquiry close today.