The University of Iowa has received approval from the Board of Regents, State of Iowa, to enter into a 50-year partnership involving its utility system with ENGIE North America and Meridiam. The UI is one of the first universities in the country to engage in a utility public-private partnership (P3).
The selection of ENGIE and Meridiam followed a rigorous 10-month competitive bidding process, which involved university shared governance members and academic leadership. This partnership will allow the university to invest $15 million per fiscal year via grants dedicated to supporting the UI’s strategic plan and core missions of teaching, research, and scholarship.
The UI will place the upfront payment from ENGIE and Meridiam into an endowment in order to acquire the additional funding for institutional priorities. After paying off $153 million in existing utility system bonds and $13 million in consulting fees, the endowment will have about $999 million.
ENGIE is a world-class operator that provides financing, design, construction management, energy procurement, utility, and operations and maintenance services to 150+ higher education and health care facilities in the United States. Meridiam is a leading worldwide developer, equity investor, and long-term partner specializing in the development, financing, and management of sustainable P3 infrastructure.
Under the agreement with ENGIE and Meridiam, the UI will maintain ownership of its utility system and ENGIE will perform all operations with respect to steam, cooling, water, and electricity.
"The UI is pleased to partner with ENGIE and Meridiam over the next 50 years in order to deliver on its strategic plan, which is focused on the success of students; research and discovery; diversity, equity, and inclusion; and engagement,” says UI President Bruce Harreld. “With ENGIE and Meridiam, the university has found partners that share our values of investing in our people, improving sustainability, and transitioning toward a zero-carbon footprint.”
Under the agreement, ENGIE and Meridiam will work with the university to ensure:
- That the UI meets its goal of being coal-free by Jan. 1, 2025, if not sooner.
- That sources of renewable fuels and incorporating sustainable, lower-cost fuel options into the existing utility systems will be explored.
- A seamless transition to welcome all current UI utility system employees.
- Students, faculty, and staff will have opportunities to benefit from experiential learning and innovation via internships, projects, and research opportunities in energy and other areas.
“ENGIE looks forward to supporting the University of Iowa in its zero-carbon transition,” says Gwenaëlle Avice-Huet, CEO of ENGIE North America and executive vice president in charge of ENGIE’s Global Renewable Business Line. “Over the next 50 years, we will continually work to improve system efficiency, cost, and performance both operationally and environmentally, leveraging the power of our global experience and focus on innovation to make the university a showcase in next-generation energy management and sustainability.”
The Board of Regents also approved the formation of a new 501(c)(3), the UI Strategic Initiatives Fund. The board overseeing the fund will include the UI’s senior vice president for finance and operations, a designee from Faculty Senate, and a designee from the Board of Regents. The board will meet quarterly to review the operation and earnings of the endowment fund, and determine the yearly allocation to the university.
The expected $15 million available per fiscal year will be allocated through an open and transparent grant process. Anyone in the campus community will be able to submit a proposal for a one- to five-year grant that supports the university’s strategic plan. Proposals will then go through a vetting process during which the UI Path Forward Steering Committee and Budget Review Board, comprised of shared governance members and administrators, will make the final decisions regarding requests.
“The university has done its due diligence while exploring a P3 involving its utility system, and we’re looking forward to engaging in this partnership,” says Harreld. “It’s a way to act today and protect our existing resources while planning for the future.”
To learn more, attend one of two upcoming information sessions on Dec. 12:
- 9 to 10:30 a.m. in the Big Ten Theatre, Iowa Memorial Union, room 348
- 2 to 3:30 p.m. in the Urmila Sahai Conference Room, Medical Education Research Facility, room 2117
For updates and more information, visit uiowa.edu/p3.