International Public Partnerships Limited has announced that the Amber Consortium, of which INPP is part, has reached financial close on the last of the five privately financed batches of schools being delivered through the Priority Schools Building Programme (PSBP).
The project uses an innovative financing model based upon the establishment of a funding vehicle known as the ‘Aggregator’. This was established by the company in November 2014. One of the key features of the Aggregator is the ability to warehouse loans and thereby aggregate total financing requirements across all five schools batches.
The fifth tranche of funding will support the development and operation of seven new-build secondary schools in Yorkshire over a 25-year period. The total capital expenditure on the schools in this batch is approximately £129 million, with the Aggregator providing £118 million.
The company will fund £5.1 million with the European Investment Bank and Aviva providing the remainder. The project sponsors who will provide the balance of the equity and subordinated debt include Laing O’Rourke, Equitix and IUK Investments Limited (HM Treasury), the private equity unit established to invest in government infrastructure projects under PF2.
The investment will be funded through the company’s existing cash resources and debt facility. Following financial close of the fifth and final batch, the company will have approximately £145 million of uncommitted credit available under its £300 million revolving credit facility (after taking into account its future investment obligations into new projects including its investment commitments to the Thames Tideway Tunnel project).
INPP commits another £5m to new schools programme