International Public Partnerships Limited (INPP) has announced that it has reached financial close on ten Building Schools for the Future (BSF) interests from Balfour Beatty.

INPP has invested £72.3 million (US$94.9 million).

The investment opportunity was secured through pre-emption rights that INPP gained as part of its purchase of Building Schools for the Future Investments LLP (BSFI). INPP acquired BSFI from the Department of Education and Partnerships UK in August 2011.

Since this time, the company has built up considerable experience in managing investments in schools delivered under PFI and PPP programmes, and the acquisition of new interests complement the existing portfolio of over 200 individual schools across the UK.

Owing to its established position in UK education infrastructure, INPP already held 10% interests in seven of the Balfour Beatty investments in question, and as a result of the transaction has increased its stake to 90% in each scheme. INPP has also acquired new interests of between 80% to 99% in a further three BSF schemes previously under Balfour Beatty's ownership.

Like the other BSF projects in which INPP invests, these investments meet INPP's investment criteria:

• The projects have long operational lives with a remaining operational term of on average, 21 years.
• The investments conform to the typical UK BSF PFI project funding structure with a well-established and standard form risk framework.
• The underlying projects are operational and yielding and will contribute to INPP's portfolio return immediately upon acquisition.
• The investments' debt is non-recourse at the project level and matched to the life of the project.

The investment has been completed at a level that offers a projected return that INPP regards as attractive for its investors in current market conditions.

As expected, INPP funded the acquisition from the £125 million (US$164 million) capital raised in July 2016. Following this transaction, the balance of the funds raised is £26.6 million (US$34.9 million), all of which is earmarked for committed investments, notably the Tideway project. 

In addition, with respect to its £300 million (US$393 million) revolving corporate debt facility, the company currently has drawn £141.6 million (US$185,9 million) by way of letters of credit. Again, these drawings support the company's future investment obligations including its investment commitments to the Tideway project.