IOWA CITY, Iowa (AP) — A collaboration of two French companies will pay the University of Iowa $1.1 billion for the rights to operate its utility system for the next 50 years under a proposal released and quickly approved Tuesday.
The Iowa Board of Regents voted during a meeting in Urbandale to approve the leasing agreement with a newly-formed consortium made up of energy company ENGIE and investor Meridiam.
Gov. Kim Reynolds told the regents that it was a “historic day for higher education in Iowa.” She called it an innovative partnership that will create revenue to finance the school’s strategic plan.
Critics have called the deal risky, and attacked the university for not releasing the details until moments before Tuesday’s meeting.
Documents show that the ENGIE-Meridiam consortium was recommended by a project team that considered bids from several others.
The university will pay the new company a fee of $35 million annually, plus operations and maintenance costs and reimbursement for capital improvements.
The company will be responsible for running plants that distribute electricity, water, steam and compressed air and the sanitary sewer and storm sewer system.
The $1.165 billion upfront payment will be invested in an endowment that would be used for energy costs and strategic education and research initiatives.