AIDEA’s recent actions have been controversial. But historically, they’ve been profitable.

When you ask Alaskans about the smartest thing we ever did with our oil money, when we had it, most will say creating the Permanent Fund. Some would add the Permanent Fund dividend.

Few are likely to mention some other things we did with oil money that also turned out to be important.

I speak of several independent state corporations set up in the 1970s and 1980s that were endowed with oil money and with assignments to invest and grow our state’s economy.

One of those is the Alaska Housing Finance Corp., or AHFC, which was given cash to help finance home mortgages. AHFC has performed well. Older Alaskans will remember a time of high inflation and high interest rates in the early 1980s when there was almost no money available in the state for long-term home financing.

AHFC stepped in to save our bacon.

There are now others in the Alaska home mortgage market, but the state housing corporation is still pretty important, and it does a lot of other things housing-related, like managing the state’s low-income public housing programs.

Another 1980s-era state investment was to buy the Alaska Railroad Corp., which operates freight and passenger service from Southcentral to Interior Alaska. The federal government built the railroad in 1917 to help open the Interior. When World War II came, it turned out to be vital to national defense, too.

The federal government wanted to get out of the railroad business and would have shut it down had the state not purchased it, preserving the vital freight link and passenger service. The railroad operates like a private business and is profitable.

One of the most interesting of the state’s initiatives is the Alaska Industrial Development and Export Authority, or AIDEA, which formed as a kind of state development finance bank.

These days people read about AIDEA’s financing of a mining road in the Brooks Range and, more recently, an out-of-the-box gambit to bid on federal oil leases in the Arctic National Wildlife Refuge’s coastal plain. This last was to keep open the option of oil companies exploring there. An unusual advantage is the state gets 50 cents back for every dollar spent on these leases, which are good for 10 years.

Some Alaskans disagree with those priorities, but what’s important is that AIDEA is doing what it is supposed to do under state law, which is to spur economic development.

As with the state housing corporation, AIDEA has a core financing mission that’s vital to the state’s business community. Several decades ago, there was a sharp contraction in availability of long-term financing for business development. Out-of-state institutions that provided this money fled Alaska, which was seen as a faraway, small and high-risk market.

Alaska’s banks were too small at the time to do a lot of long-term lending. They could do short-term financing, but not the long-term.

AIDEA, which had assets, was asked to step in as the long-term partner. Alaska banks originated the loans, checking the viability of projects and borrowers’ credit, asking the authority to share the loan by taking the long-term part. In this way, banks were able to get their money out after a few years and do new project financing, which is good for the economy.

All this provided crucial support at a time when Alaska’s economy was depressed there was little out-of-state money available to help businesses. The crisis passed and, as in housing, there’s other commercial financing available today. But AIDEA’s commercial lending participation program is still important and has been a real success.

In fact, it’s very profitable for the authority’s business and helps provide income for an annual dividend AIDEA pays to the state (AHFC also pays a dividend).

Another very profitable part of AIDEA’s business is a late 1980′s mining road investment for the Red Dog Mine north of Kotzebue, done in partnership with NANA Regional Corp., which owns this rich zinc-lead deposit.

This was a daring venture at the time. Cominco, the mining company involved (it is now Teck Alaska) didn’t have the financial strength to build both the mine and a 57-mile road and port on the Chukchi Sea to ship the ore. NANA certainly didn’t have deep pockets at the time.

But the state did, with oil money. AIDEA was given the assignment to get the road and port built, which it did.

Another success. The jobs generated by this project has lifted Northwest Alaska economically, creating careers, education and taxes for the North West Arctic Borough.

The authority owns the road and port, and the mine pays fees for their use. It is a good investment, providing steady revenues to AIDEA for decades.

Let’s get back to the road into the western Brooks Range. This is potentially another Red Dog for AIDEA — critical infrastructure that will spur new mines, jobs and income. But unlike Red Dog, there’s not yet a mine at the end of the road. There might be — companies are exploring promising copper deposits, but it’s not a sure bet.

Many Alaskans see downsides in this road opening up a large area of wilderness, and Alaska Native villages in the region worry about nonresidents using the road to encroach on subsistence resources. All of this is worth a discussion.

But one thing I know is that this road won’t be built unless there are one or more mines to pay for it, because that’s the way AIDEA works. Right now, the authority’s expenses for planning work underway is shared 50-50 with companies.

Sometimes our state development corporations are handed unusual assignments. AIDEA’s venture in ANWR bidding is one of those. Fortunately, it doesn’t involve a lot of money.

There’s always risks in moves like these, and not all bets pay off. AIDEA has seen flops, but it has seen a lot of wins too.

Few other states have development tools like these state corporations, which were given real resources to work with. Our Permanent Fund is one legacy of oil. These independent corporations are another.

Tim Bradner is copublisher of the Alaska Economic Report and Alaska Legislative Digest.

The views expressed here are the writer’s and are not necessarily endorsed by the Anchorage Daily News, which welcomes a broad range of viewpoints. To submit a piece for consideration, email commentary(at)adn.com. Send submissions shorter than 200 words to letters@adn.com or click here to submit via any web browser. Read our full guidelines for letters and commentaries here.