The project is expected to support up to 700 jobs during construction and more than 500 new jobs for the region when fully operational.
"NAIF has approved a loan of $175 million to support the mine's first stage of development which includes rail, and transmission lines, water pipelines, access roads and a coal handling preparation plant," minister for resources Keith Pitt said.
The loan has a 10-year tenor.
Olive Downs will initially operate at 4.5 million tonnes per annum, expanding to 15Mtpa, with low-cost production and a long life mine estimated at 80 years.
"The benefit to the Queensland economy and the Central Queensland region is significant, with the project contributing more than $10 billion over the life of mine," Pembroke chairman and CEO Barry Tudor said.
Olive Downs received federal and state approvals last year.
"Olive Downs will truly be a 21st century mine built to 21st century standards which is designed to meet and exceed the most stringent environmental obligations whilst creating local jobs," Tudor said.
"As a new mine, without legacy issues, Pembroke's Olive Downs Mine can be the vanguard for others in the industry.
"We will proactively manage our greenhouse gas emissions and reduce our scope 1 and 2 emissions using technology and innovation.
"Olive Downs sits in the lowest quartile of emissions intensity for global steelmaking coal mines. Surrounding the mine, we have established large conservation areas, which measure more than 30,000 hectares, for perpetual offsets to protect fauna and flora.
"We are also committed to progressively rehabilitating the disturbed areas of the mine site from the start of production."
Pembroke is an Australian specialist steelmaking coal company that is backed by its major shareholder, energy and resources private equity firm Denham Capital.