The European Investment Bank (EIB) is lending GBP 60 million for The Highland Council Education Service's second PPP schools project to build and maintain ten schools.
The project will provide for three new secondary schools, five new primary schools (including one teaching in the Gaelic language), one combined primary and secondary school and a new school for children with special educational needs. Many schools will be equipped with educational, cultural and sporting facilities for use by the local community. The EIB is an active promoter of the Lisbon strategy, the EU-wide policy for the development of a knowledge-based society. The loan will enhance the educational environment in this Scottish region as well as providing lifelong learning facilities for members of the wider community. The project is also expected to contribute to the economic growth and development of the Highland region, an EU transitional objective 1 area.
The project will take the form of a Public Private Partnership (PPP). EIB funds will be provided directly to a special purpose concession company, Alpha Schools (Highland) Project plc, jointly sponsored by Morrison Project Investments Limited and Northern Infrastructure Investments plc.
The remainder of the project's finance will come from up to GBP 100 million of senior bonds (for which RBC Capital Markets acted as lead manager), together with junior subordinated loan stock and ordinary shares. Ambac Assurance Limited will provide a guarantee on the scheduled payments of principal and interest under the bonds and the EIB loan.
The private partners have extensive knowledge and experience of implementing UK education PPP projects and will design, construct and manage the project under a concession of up to 31-years granted by the public partner, The Highland Council.
EIB Vice-president Peter Sedgwick commented: "This loan confirms the EIB's commitment to support operations in which the public and private sectors work together to the benefit of local communities. The EIB aims to be involved in investment that favours innovation and helps develop the Highland Region."
The Highland Council's Director of Education Culture and Sport, Bruce Robertson said: " The Highlands is the most diverse area of Scotland and the EIB support will make a significant contribution to 21 Century Highland communities right across an area larger than Belgium. The Highland Council was delighted when the EIB agreed to be part of the partners in this initiative which is the largest public sector investment made by Council."