Funding for education and innovation will receive a significant boost from a targeted GBP 500m financing package to three UK banks from the European Investment Bank, the European Union’s long-term lending institution. Formal agreement has been reached for the first tranche of the UK Knowledge Economy loan that will provide GBP 150m for Higher and Further Education facilities, science parks and incubation centres. Further funding will be available next year as additional projects are identified and other banks are expected to join the programme. Overall investment in projects supported by the UK Knowledge Economy loan is expected to reach more than GBP 2 billion.
This programme is part of the European Investment Bank’s broader engagement to support and strengthen the UK’s knowledge economy. Eligible projects include campus redevelopments and relocation and construction of specialist science park and start-up company incubator facilities. The investment support programme will be spread over 18 months and build on the specialist education finance experience of the partner banks.
“The UK knowledge economy investment programme will contribute to funding new and improved education and innovation facilities across the country. Improving knowledge, skills and research is crucial for Britain's and Europe’s future. The EIB is delighted to support the programme.” said Simon Brooks, European Investment Bank Vice President responsible for the United Kingdom.
Welcoming the announcement UK Secretary of State for Business Innovation and Skills Dr Vince Cable said "It is good to see the EIB continue to recognise the leading role that British universities, scientists and businesses play in innovation and technology development in Europe, and the world class companies that emerge from our research base. Research and innovation are key drivers of the Government's ambition to rebalance our economy and to go for growth. The science and research community is very successful at securing funding from a diverse range of sources, so this new loan facility will be a welcome addition to the options available for universities and science parks in the UK."
"Investing in projects which encourage and nurture education and innovation will be key to the UK's long-term success. It's an area RBS has been committed to for some time, so we're delighted to be entering into this new partnership with the EIB." added Stewart Ward, Head of Education sector, RBS Corporate & Institutional Banking.
Mark Stokes, managing director, Large Corporate, Lloyds Banking Group said: “The education sector is of critical importance to Lloyds Banking Group and the economy as a whole and we are proud to be supporting this latest initiative from the European Investment Bank. Our track record and expertise in the sector - as well as our relationships with major educational institutions - means that through the scheme we will be able to provide valuable funding for further and higher education projects across the UK. Our specialist relationship managers throughout the country will be able to use the new money to help fund initiatives in their regions. These will include campus refurbishments, the development of new subject areas and investment in vital research projects that will have a long term impact on the UK economy and its standing as a provider of education across the globe."
Steve Pateman, Head of UK Corporate and Commercial Banking, Santander UK, said: “Our initial £100 million agreement with the European Investment Bank, clearly signals Santander’s commitment to supporting Higher Education and Further Education institutions. The Education sector is vitally important to the UK economy and the discounted terms, available through the EIB Education Loan Scheme, together with our specialist Education relationship teams, based in the bank’s regional corporate business centre network, means that Santander has both the product and the people to become the bank of choice for educational organisations.The bank has previously participated in the EIB Small and Medium-sized Enterprise (SME) loan scheme, currently enabling Santander to provide an additional £100 million of lending to UK SMEs.”
The UK Knowledge Economy lending programme complements the ‘Europe 2020’ initiative for recovery from the recession and social and economic growth over the next decade. This encourages smart, sustainable, inclusive growth. Education and training are crucial to enable Europe to meet its ambitions. Modernising universities and opening up wider education to more people are important for smart growth; building quality and access in basic education and lifelong learning will help deliver inclusive growth.
Notes for Editors
- The European Investment Bank (EIB), the European Union’s bank, provides long-term debt financing for projects that further EU economic policies. It has been active in the UK since 1973, supporting investment ranging from motorways and rail, to water supply and treatment, energy schemes, hospitals, universities, high tech development in industry, as well as small and medium-sized businesses.
- In the last five years (2005-2009) the European Investment Bank channelled nearly £16 billion into projects in the UK, including GBP 1.2bn for education investment alone. In 2009 the European Investment Bank provided nearly £5 billion for projects in the UK.
- The EIB is one the largest multilateral financing institutions, lending EUR 79 billion (GBP 69 billion) in 2009. Its overall lending target for 2010 is EUR 66 billion (GBP 57 billion). The Bank operates in keeping with banking practice and in collaboration with the wider banking community.