Works to improve the quality and efficiency of acute hospital services in Blackburn are being supported with a £50 million (EUR 80.4) loan from the European Investment Bank, the European Union's long-term financing institution. EIB's contribution is being financed through a back-to-back index-linked bond issue and by involving EIB, the project has gained access to very long maturity funding at a highly competitive cost.

The project is promoted by the Blackburn, Hyndburn & Ribble Valley Health Care NHS Trust, a public sector statutory body that provides acute general hospital services and delivers to certain non-clinical buildings services to a population of around 504,000.

The EIB loan is for investment to deliver a general hospital in Blackburn that will be relocated to the single site Hospital being carried out by Consort Healthcare (Blackburn) Limited (Consort), a special purpose concession company that has been awarded a 38-year concession to design, build and finance the works associated with the extension of the hospital. Consort is owned by Balfour Beatty Infrastructure Investments Ltd and by HSBC Infrastructure Fund Management Limited.

Following the project's completion, one of the town's two existing acute hospital sites, Blackburn Royal Infirmary, will close and its services will be relocated to the site of the existing Queens Park Hospital.

EIB Vice-President Peter Sedgwick said: This project will greatly improve the quality and efficiency of acute hospital services in an area with significant health needs. There will be direct benefits to patients as a result of integrating specialist services onto one site and eliminating the need for inter-site patient transfers. Such PPP projects play a key role in the UK government's Private Finance Initiative and are making an important contribution to lowering the cost of such strategic investment to the public sector. They also introduce private sector efficiencies and expertise into the construction and maintenance of the project.

The European Investment Bank finances capital investment furthering EU integration, in particular: regional development; trans-European networks in transport, telecoms and energy; industrial competitiveness and integration; small and medium sized enterprises; environmental protection; energy security, and health and education projects. It also operates outside the EU within the framework of the EU's external co-operation policy. Owned by the EU Member States, the EIB raises its funds on the international capital markets and is AAA-rated. In 2002, the EIB lent some EUR 40 billion, of which EUR 3.3 billion in the UK.

Blackburn Hospital is the EIB's second PPP project in the UK health sector: the previous operation concerned the Dudley Group of Hospitals PPP Project.