Juneau — At a Feb. 17 Senate Finance Committee hearing, the Alaska Industrial Development and Export Authority reported a strong FY 2024 performance and walked senators through its portfolio and active projects while answering detailed questions about loan performance, write‑downs and local benefits from infrastructure projects.

Key financials and portfolio overview

ADA told senators it produced its highest recent statutory net income in FY 2024 at $65,000,000 and that its net position increased by approximately $53,000,000. ADA said it has declared roughly $500,000,000 in dividends back to the State Treasury since 1997 and that this year’s dividend was about $20,000,000 — the largest in roughly a decade. Executive Director Randy Veraro said ADA currently employs 43 staff.

Portfolio composition and liquidity

ADA presented a breakdown of assets during the hearing and said its loan participation program is the largest slice of its balance sheet — ADA reported roughly $532,000,000 in loan participations. A separate pool of investment funds, presented as a multi‑year (roughly six‑year) cycle, matures periodically; ADA staff said they expect to move maturing investments into cash on hand to support new project financings. Senators asked whether ADA’s investment funds are invested only in Alaska — ADA said the investments include domestic and international holdings and that maturities are uneven from year to year.

Underwriting and loan performance

ADA described its loan participation process as a two‑round review: local Alaska banks underwrite an application and then ADA performs its own underwriting and board review before making a commitment. ADA reported a very low default rate in its loan participation portfolio, with fewer than 10 loans restructured in recent periods and no active defaults in that program.

Senators pressed ADA for written follow‑up on delinquency metrics. Chairman Stedman asked ADA to provide a simple accounting of loans past 30 days, restructured loans and other arrears; ADA said staff would provide those statistics in writing and that loan officer Tiffany Jansen could assist.

Troubled projects and write‑downs

Committee members raised past troubled projects. ADA described a recent settlement on a Bluecrest loan: Bluecrest had a balance roughly $14,000,000 that was resolved with a lump‑sum payment of about $6,870,000 and ADA retained an interest in an on‑site man camp; the remaining balance was written off. ADA also described a larger Mustang project write‑down; ADA said it recovered roughly $17,000,000 in tax credits related to Mustang but wrote off a significant portion of the project (ADA told the committee the write‑down was on the order of tens of millions; senators referenced a $70,000,000 figure in the hearing and asked for written confirmation).

ADA said underwriting changes have been made after Mustang, including greater scrutiny of LLC structures, independent collateral valuations and an improved review process.

Active projects highlighted to the committee

- Ali S. Chem (methanol plant, North Slope): ADA said it is supporting a methanol plant project that would use North Slope gas to produce methanol and ultra‑low sulfur diesel; ADA said the project should create construction jobs and some permanent positions. ADA listed a financing figure in the presentation (about $70,000,000) for the project.

- HECS/Cook Inlet: ADA said it has established a revolving line of credit for HECS to support drilling in Cook Inlet and noted that production volumes and timing are part of how small producers and larger projects will coexist in the market.

- Ambler Access road: ADA identified an FY26 capital request of roughly $2.5 million to advance permitting for the West Susitna/Ambler access road and estimated the full construction cost for the Ambler road at between $500,000,000 and $1,000,000,000 in committee discussion. ADA said the federal right‑of‑way process is moving and that ownership of road segments might include ADA, ANCSA regional corporations, tribes and syndicates; public access would be limited and the road is planned as an industrial access route with some community access provisions for fuel, medevac and supplies.

- ANWR (referred to in testimony as “Anwar”): ADA said it holds leases and is updating geological work and seismic data on ANWR leases and that preliminary indications point to significant hydrocarbon resources; ADA said it is working on an assessment and expects to report back to the committee when complete.

Underwriting collateral and lessons learned

ADA acknowledged that in Mustang the agency accepted leases as collateral that later proved insufficient to cover the investment and that holding those assets imposed carrying costs (taxes, maintenance). Veraro said ADA has tightened underwriting standards and will require independent assessments of lease and asset value before accepting such collateral in the future.

Local hire, tribal participation and community benefits

Senators repeatedly asked about local hire and community benefit provisions on large projects. ADA said it is exploring tribal business corporations as a mechanism for local ownership shares in projects such as Ambler and that some mine proponents can, and historically have, required shareholder hire. Witness Warren Douglas, who spoke during public comment about jobs in his region, told the committee: “If not resource development, then what? … I want my grandchildren, my kids, to have a good life, have a job.” ADA said it will continue to work with communities on local hire provisions but did not present a single integrated state‑level plan for displacement or workforce transition.

Budget and personnel notes

CFO Jean Kornmuller briefed the committee on ADA’s FY26 management plan and the effects of recent statutory changes (SB 307 was cited) that moved staff and functions to other entities; ADA said it is shifting some contractual work to in‑house personnel and requested additional detail on a reduction in contractual services for the committee’s follow‑up.

What the committee requested

Senators asked ADA for written follow‑up on several items: a detailed delinquency and restructured loan list, a breakdown of contractual services reductions, clarification on the Mustang write‑down and recoveries, and additional detail on Ambler rights‑of‑way and local‑hire proposals. ADA said staff and officers — including its loan officer and chief investment officer — would provide additional written materials.

No formal action was taken; the hearing closed with committee members thanking ADA staff and asking for further documentation.