Hundreds of primary and secondary school pupils across the north east of England will benefit from 12 brand new schools being supported by a GBP 46.3 million long-term loan from the European Investment Bank. The new schools will be built on either existing or new sites and construction is expected to start in the coming weeks.
The new schools comprise the first batch of five regional batches of new schools to be built under the Priority School Building Programme (PSBP). The European Investment Bank is expected to support construction of a total of 46 new state primary and secondary schools under the initiative and provide around GBP 274 million of overall support. The loans from Europe’s long-term lending institution will be for around 25 years and represent around 40% of the overall project cost.
“The European Investment Bank is committed to supporting long-term investment that improves education across Europe and in the UK thousands of primary and secondary school pupils, and students in higher and further education have benefited from investment in better facilities and modern learning environments following EIB backed education projects. Children in North Tyneside, Northumberland, Gateshead, Sunderland, County Durham, Redcar and Cleveland and Stockton on Tees will enjoy better schools in the years to come from the new initiative agreed today and local construction companies will play a key role in building better schools across the country under the wider Priority School Building Programme.” said Jonathan Taylor, European Investment Bank Vice-President.
Twelve schools will be built in the north-east in the first privately funded batch of the PSBP with a total of the GBP 112 million being invested.
The six primary schools are Mandale Mill in Stockton on Tees, Hylton Castle Primary and Shiney Row Primary in Sunderland, and Lingey House, Roman Road and Front School Community Primary schools in Gateshead. The six secondary schools are Bedlingtonshire Community High and The Duchess’s Community High schools in Northumberland, Laurence Jackson School in Redcar and Cleveland, Longbenton Community College in North Tyneside and Seaham School of Technology in County Durham.
By grouping school development schemes aggregating funding requirements, the Education Funding Agency has been able to access cheaper finance, and streamline procurement for each batch of schools.
The PSBP is a centrally managed programme set up to address the needs of the schools most in need of urgent repair. Through the programme, 260 schools will be rebuilt or have their condition needs met by the Education Funding Agency (EFA). Senior debt will be provided by the European Investment Bank and senior bonds subscribed for by Aviva Annuity UK Limited.
Aviva and the European Investment Bank are each expected to provide around 50% of senior debt and INPP will provide mezzanine debt. Amber Infrastructure will act as Loan Administration Agent and Corporate Services Provider. Ashurst LLP (legal) and HSBC (financial) have advised the EFA on the procurement of the aggregator.
In the last decade the European Investment Bank has provided nearly GBP 2.5 billion for education investment across the UK. This has included support for university campus development in Edinburgh, York, Strathclyde, Swansea, Aston, Birmingham and Kent and backing for construction of new vocational training buildings at the City of Glasgow College. The EIB has supported school investment under the Building Schools for the Future programme in recent years as well as directly for nine schools in Newcastle under a local scheme.
Last year the European Investment Bank provided a record GBP 6 billion for long-term investment in key infrastructure across the UK including support for new hospitals, better water and sewerage infrastructure, renewable energy and energy transmission and private sector investment.