New Agreement Will Pay University of Iowa More Than $1 Billion
A group of French companies won the bidding war for a half-century contract with the University of Iowa to handle the university's utility system. Iowa gets $1.165 billion upfront, which is just a fraction of what the companies expect to haul in over the next five decades.
Energy company ENGIE and Meridiam, an asset manager based in Paris, combined to form the Hawkeye Energy Collaborative. They beat out three other groups, all of which offered a smaller amount of money upfront. ENGIE currently has a similar deal with Ohio State University.
ENGIE CEO, Isabelle Kocher said the plan is to improve the system in place at the University of Iowa over the next 50 years with,
Efficiency, cost, and performance, both operationally and environmentally. (Iowa will become a ) landmark clean energy campus community for future generations.
The Iowa Board of Regents has approved the deal. Once the University of Iowa pays off a $153 million debt on its current utility system, and another $13 million to consultants who constructed the contract, the remaining money, about $1 billion, will be put in an endowment.
Iowa is expected to pay out more than $6.8 billion during the life of the contract. According to U.S. News, Iowa will need to generate cash flow of $3 billion in the next 50 years in order to consider the deal a success.