The European Investment Bank, the European Union's financing institution is lending GBP 37 million (ECU 56 million) for the construction of five schools in Falkirk, Scotland the total cost of which is GBP 80m. The Falkirk Schools project is the largest education Private Finance Initiative (PFI) launched in the UK to date and is a pathfinder for future education projects. The EIB's loan is to Class 98 Limited, a special purpose company owned by a consortium led by Ballast Wiltshier Plc, Charterhouse Private Equity and Quayle Munro. Bank of Scotland is co-financing the project.

Commenting on the scheme, EIB President Sir Brian Unwin said "This is the first scheme the EIB has supported in the education sector in the UK under the Bank's new Amsterdam Special Action Programme. As the largest PFI education project so far launched in the UK, it will help to harness the skills of the private sector to make a major improvement in the quality of school infrastructure in the Falkirk area. I hope it will set a pattern for further such projects to which the EIB can contribute in the future".

Class 98 will design, build and provide facilities management to four secondary schools and one special needs school for a period of 25 years under a single concession contract granted by Falkirk Council. The construction and upgrading works are due to be completed by July 2000.

The European Investment Bank, the European Union's long-term lending institution, finances capital investment furthering EU integration, in particular: regional development; trans-European networks in transport, telecoms and energy; industrial competitiveness and integration; SMEs; environmental protection; and energy security. It also operates outside the EU within the framework of the EU's co-operation external policy. Owned by the Member States, the EIB raises its funds on capital markets (AAA issuer). Sir Brian Unwin is the first British President of the institution and assumed office in 1993. In 1997, the EIB lent over ECU 26 billion, of which some £3 billion in the UK, and borrowed ECU 23 billion on capital markets.

The EIB's Amsterdam programme (ASAP) was set up following the European Council's declaration on growth and employment at Amsterdam in June 1997 that called on the EIB to step up lending for investment to help job-creation. The ASAP includes a special window to provide risk capital for high-growth SMEs; new lending for education, health and urban renewal; and expansion of financing for trans-European networks and other major infrastructure schemes.

The conversion rates used by the EIB for statistical purposes during the current quarter are those obtaining on 30/06/1998: 1 ECU = 0.66 GBP, 0.795 IEP.