The University of Idaho will lease its steam plant and utility system to a concessionaire as part of a public-private partnership (P3) that will allow investment in student access, success and research initiatives for the next half-century.
The 50-year lease and concession agreement with Sacryr Plenary Utility Partners Idaho LLC was approved today, Nov. 2, by the Idaho State Board of Education.
“The P3 agreement will allow the university to better invest in the student and research endeavors that have been part of our land-grant mission for more than 130 years. In addition to scholarship support that will improve the go-on rate in Idaho, the transaction creates a concessionaire-paid maintenance plan for our steam plant and utility system that will free up state funding for other projects,” University of Idaho President Scott Green said. “This partnership is a wise business decision that will benefit the university for generations to come.”
The net proceeds from an up-front payment of $225 million will be invested by the university and are expected to generate $6 million annually for the university to fund strategic initiatives. A portion of the funding will go to student scholarships that will, in turn, create additional tuition revenue and improve access for Idaho’s students. An investment in research has the potential to increase the university’s competitiveness for research funding to support statewide initiatives. In addition, the project provides an opportunity to improve efficiency of the steam plant and utilities through a long-term maintenance plan.
U of I will pay annual utility and operations fees to the concessionaire as part of the agreement. By improving efficiencies and processes, the concessionaire will be able to share in the benefit of cost savings.
Paired with the many steps the university has taken to improve its financial situation over the past 16 months, the public-private partnership builds on a strong foundation for investment in the future by the university.
U of I is not alone in using public-private partnerships to support strategic initiatives. The University of Iowa and The Ohio State University have P3 agreements for their utility systems, among others.
To learn more about the transaction and what it means for U of I, visit the FAQ