World's largest bank makes EU higher education a top priority

The Luxembourg-based European Investment Bank is aiming to become one of the most important sources of finance for higher education in the newly expanded European Union.

Jean-Jacques Mertens, head of the bank's research and development task force, said that innovation in higher education research would be the main theme of the EIB's proposed E50 billion (£33.6 billion) financing in the period up to 2010.

The EIB borrows on world capital markets and re-lends to governments and public bodies, other banks and private companies at near-commercial rates.

Education, along with health, forms the EIB's "human capital" department, which receives up to 15 per cent of turnover. "Given that the EIB is the biggest financial institution in the world, that's not a trivial sum," Stephen Wright, the department head, said.

In 2003 the bank lent E42.3 billion for higher education in the Czech Republic, Germany, Italy, Ireland, Spain, Portugal and the UK.

The EIB is also helping to directly finance students. It has a project at Italy's elite technical universities and more projects are on the way.