Axium Infrastructure and Engie have reached financial close on a public-private partnership deal to manage and increase the efficiency of Ohio State University’s energy assets for 50 years.
The consortium agreed to pay $1 billion to run the electric system powering the 485-building campus in Columbus, Ohio in exchange for annual payments that are expected to exceed $54 million. OSU’s board of trustees approved the PPP in April, stating the deal will lower energy costs and boost its endowment with the upfront payment.
Engie, headquartered in France, and Montreal-based Axium said they will install and improve the efficiency of the university’s energy system with measures including heat recovery and demand control ventilation. Their goal is to increase efficiency by at least 25 percent within 10 years.
“We believe that the Axium-Engie consortium can deliver world-class operations as well as the implementation of a 21st century sustainability programme at Ohio State’s Columbus campus.” Said Thierry Vanda, president of Axium Infrastructure’s US branch. “This investment is a landmark transaction in the infrastructure industry.”
Higher education PPPs are on the rise across the country due to several factors that make private developers an attractive option to host institutions, the report said. Facing budget shortfalls, PPPs allow schools to shift development risks to a third party and avoid taking on debt. The private sector also offers construction and long-term management expertise.
OSU has previously turned to the private sector for campus improvements. In 2012, the university agreed to let QIC Global Infrastructure manage its parking operations over a 50-year lease and $483 million deal.