Brussels, 2 December 2013. The European Investment Bank (EIB), the banks Belfius and CBC and the Ministry for School Buildings in the Wallonia-Brussels Federation have concluded an unprecedented financing agreement for the construction of new schools and the extension and modernisation of existing infrastructure. The EIB is advancing EUR 300m to the banks on preferential terms exclusively for this project. The partner banks are also contributing to the financing which will enable schools to borrow a total of EUR 600m. The savings generated by passing on the financial advantage of the EIB loan to the Wallonia-Brussels Federation can be directly reinvested in the construction of additional classroom capacity and the renovation of other facilities.
This is the first time that the EIB has financed schools in Belgium. All levels (nursery, primary and secondary) and all networks (formal and free education and that of the Wallonia-Brussels Federation) are concerned. It is also a very large-scale undertaking: EUR 300m plus a further EUR 300m from the partner banks, i.e. a total of EUR 600m that will be used by the school organising authorities from now until 2017.
Since the beginning of 2012, the Wallonia-Brussels Federation and the EIB have been working together on the project to finance places in schools, a tremendous challenge in view of the rapid population expansion expected over the next few years. This cooperation culminated today in the signing of major financing agreements between the Wallonia-Brussels Federation, the EIB and partner banks. Belfius and CBC are the first to make a commitment: Belfius for EUR 200m of investments with EUR 100m from the EIB and CBC for EUR 100m with EUR 50m from the EIB. A third bank, ING, is expected to join the programme in the near future: negotiations with the EIB and the Federation are already well under way.
This exceptional financing operation will contribute to creating more than 23 000 places in Belgium's French-speaking schools (15 700 in Brussels and 7 800 in Wallonia) by 2017, to reconstructing schools and to major renovation work - an ambitious project made possible by the financing facility that has been put into place.
The EIB is making EUR 300m available to banks that are interested in participating. These intermediaries undertake to pass on the proceeds to the schools in the form of loans on the preferential terms linked to the EIB funds, together with a contribution from their own funds (the EIB will cover up to 50% of each investment), thus reducing the final cost of the borrowed funds for the Federation. The savings can be used for additional investments in the schools, a considerable benefit for both the Federation and the pupils in the French-speaking schools.Jean-Marc Nollet, Minister of School Buildings in the Wallonia-Brussels Federation:
“The confidence shown by the EIB is a confirmation of the quality of the dossiers submitted by the Federation. Banks have to be particularly demanding before lending large sums, and the EIB even more so - its expertise in this area is recognised by both the public and the private sector - because it knows that it is putting its credibility and that of the EU on the line. If the EIB gives the go-ahead, it’s because the road is all clear.”
Pim van Ballekom, Vice-President of the European Investment Bank:
“Investing today to improve the educational facilities of tomorrow is vital for Europe's youth. A high-quality education contributes to socio-economic development and is also a crucial factor in the promotion of the knowledge economy. It is a key element for Europe’s future in the global marketplace and a priority area of activity for the EIB as the bank of the European Union.”
He also commended the excellent partnership with the Federation and the participating banks: “This operation sets a fine example and reflects the commitment of the EIB and the banks to supporting high-quality projects in order to overcome the challenges of education, training and ultimately youth employment.”
Dirk Gyselinck, Member of Belfius’s Management Committee:
“As a long-standing partner of the Wallonia-Brussels Federation, Belfius strives to provide schools with solutions for financing the construction or renovation of buildings or simply for helping them with their day-to-day financial management. It is the Belgian savers - individuals and also institutions and companies – who entrust their money to us every day, who will enable us to transform this unprecedented financing agreement into bricks, roofs, sports facilities’ and other school infrastructure. These funds provided by our customers are supplemented by the funds made available by the EIB. Belfius can therefore accomplish its traditional task of financing public investment.”
Fernand de Donnea, President of CBC Banque & Assurance:
“CBC has a historical link with schools. We have supported them for many years and continue to assist them with their projects today. Thanks to the EIB loan, we are very proud and pleased to be able to help them carry out one of their greatest projects: the provision of places in schools for our children.”
The budget component of the schools plan of the Wallonia-Brussels Federation has now been completed. The creation of 23 500 permanent places has already begun. This project is from now on fully in the hands of the architects, masons, construction workers and other building experts.
Speech of EIB Vice-President Pim van BallekomPowerpoint