Financial close has been reached for a £228 million (€270 million; $355 million) project to build two new campuses and a halls of residence at City of Glasgow College.
The project involves a 25-year concession to design, build, finance and maintain the new works.
The deal was procured by the Scottish Futures Trust through Scotland’s non-profit distributing (NPD) model, which was introduced in Scotland as an alternative to the UK’s controversial Private Finance Initiative (PFI) scheme.
The NPD model was designed to increase stakeholder involvement and cap private sector returns. PFI has itself since been superseded by a revamped “PF2” model, which has some similar aims to NPD.
Construction work on the Glasgow scheme is now being undertaken by the Glasgow Learning Quarter consortium led by Sir Robert McAlpine, a UK construction company, and Forth Electrical Services, a Scottish services contracting business.
Investment is being publicly and privately financed, including support from the Scottish government’s Scottish Funding Council and the college’s own financial reserves. The European Investment Bank is providing 50 percent of the senior debt, with German banks KfW IPEX-Bank and Helaba providing the remainder.
Iain Marley, project director for City of Glasgow College, said he was “proud” the project had achieved financial close 21 months after the publication of a OJEU (Official Journal of the European Union) notice.
The Glasgow deal follows the first Scottish NPD college deal – the £50 million Inverness College UHI project – which reached financial close in June this year. That deal was backed by a joint venture between UK developer Miller Construction and fund manager Equitix.
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