Euro billion up for grabs: any takers?

EIB calls on UK universities to apply for long-term, low-interest investment. Elizabeth Gibney reports

May 24, 2012

The European Investment Bank plans to invest up to £1 billion in UK universities over the next five years, Times Higher Education has learned.

Under the plans, the not-for-profit bank will provide long-term, low-interest loans to help build infrastructure including teaching, research and campus facilities, particularly in institutions with a "strong research base".

The EIB - which has spent £10 billion on education projects across Europe in the past five years - said it planned to target UK higher education as part of its remit to boost the ailing European economy.

Loans would cover up to half the cost of capital projects, with institutions or other lenders making up the rest.

"We're putting an emphasis on...the UK because we think it's an area [where] we can make a real contribution," said Simon Brooks, vice-president of the EIB and a former UK Treasury official.

Earlier this month, the University of Birmingham agreed a 23-year £75 million loan with the bank to redevelop its library and provide new teaching, research and sports facilities at its Edgbaston campus.

Collectively, the universities of Edinburgh, Strathclyde and York have already benefited from more than £180 million in EIB loans. A £60 million loan for a £120 million science and innovation campus at Swansea University is also in the pipeline, as well as potential projects at three other institutions.

But the EIB wants more takers for the £200 million a year it has earmarked for the UK.

The investment comes at a time when capital spending through the Higher Education Funding Council for England has been reduced by more than half. David Willetts, the universities and science minister, met with EIB representatives last month to discuss university funding.

However, Mr Brooks insisted that the EIB aims to replace private not public funding with its cash.

"One of the reasons we've decided to expand our lending to universities stems from the difficulties, for all sorts of reasons, that commercial banks currently have in providing long-term loans," he said.

Although membership of a university group is not a loan requirement, projects must be worth more than £100 million, with research-focused institutions favoured.

A spokesman for the University Alliance said that although its members were not generally struggling to fund capital projects, the EIB should recognise their value.

"After all, one of the strengths of our...sector is its diversity, with pockets of excellence found right across it," he said.

Mr Brooks said that the bank is considering methods to fund smaller programmes. It has also been in discussions about investing in early-stage spin-off companies as part of wider portfolios.

"But we're never going to be able to do tiny programmes because it's not an area where we can bring long-term and cost advantages," he said.

Despite this, he encouraged all universities interested in funding to get in touch: "One thing's for sure - if you don't ask, you certainly won't get."

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