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Although the European Investment Bank (EIB) has been involved in supporting education projects in Europe for many years, its activities are not yet so widely known in the European (higher) education circles. The Luxembourg-based institution has been supporting the building or modernisation of education infrastructure in several European countries for some time now. In the past five years (2007-2012), the bank reports to have co-financed close to 150 education projects within Europe through loans worth more than EUR 10 billion. Interestingly, according to a recent press release, about a fifth of this amount went to British institutions alone. The bank also estimates that it will continue to invest around EUR 200 million per year in the sector.
The EIB has two main financing facilities in the field of education, namely individual and intermediated loans. The main differences between the two funding mechanisms are the limit of funding and the awarding procedure. Individual loans are offered for project proposals with a loan request higher than EUR 25 million. The decision over such proposals lies with the EIB itself. On the other hand, the intermediated loans are handled on behalf of the EIB by other banks and intermediaries that act at the national level, these being also the entities that hold the decision-making power over the applications.
As a general rule, the bank, be it the EIB or one of the national intermediaries, can award up to 50% of the total investment costs of a project. Applicants can be both public and private entities. In addition to Euro (EUR), the bank can lend in other currencies such as UK Sterling (GBP), US Dollar (USD), and in the currencies of candidate countries and other EIB partner countries. Repayment of loans is generally on a semi-annual or annual basis, and grace periods can normally be granted during the construction phase of a project.
Examples of recent loan awardees are the University of Birmingham (GBP 75 million – EUR 93.8 million), the University of Edinburgh (GBP 50 million – EUR 62.5 million) and the Universidades de Andalucía (EUR 40 million). These project proposals mainly focused on the refurbishment of university campuses (e.g. building of modern libraries, sport centres, research facilities, etc.).European Investment Bank (EIB) EIB (University of Birmingham press release)