Up to £500 million is being made available for UK universities to retrofit their campuses to become more energy efficient.

The new initiative from the National Wealth Fund, a Treasury-backed fund that invests in clean energy and growth industries, and Lloyds Banking Group hopes to modernise up to 300 buildings.

Lloyds has agreed to provide up to £500 million in lending, with the wealth fund providing financial guarantees of £350 million.

These guarantees will allow the bank to “offer longer tenors and more flexible financing that helps make retrofit projects viable”, according to a statement announcing the project.

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It builds on a partnership between the two that has provided similar amounts of money to help retrofit social housing.

The funding can be used to help universities invest in energy-efficiency upgrades and low-carbon heating, helping to reduce emissions and lower long-term energy costs.

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Universities “represent a hard-to-abate part of the built environment”, given their large, diverse estates that include many specialist and older buildings, the statement said. Decarbonisation has been estimated to cost the sector as a whole £8.8 billion. A report in 2023 estimated that institutions will need to spend an average of nearly £125 million each to fully decarbonise. 

Universities have taken steps to reduce emissions but often progress has been slow. Analysis��������ߣߣ��Ƶ���Ǵ�  figures has found emissions in 2023-24 fell by 4 per cent across 116 institutions, with many experts urging the sector to go further. 

Oliver Holbourn, the CEO of the National Wealth Fund, said that the UK’s universities are a “significant national asset, acting as vital anchors for place-based growth by providing opportunity and driving innovation”.

“By partnering with Lloyds, the National Wealth Fund is helping bring university estates up to spec, enabling long-term affordable financing that will accelerate energy-efficiency upgrades and heat decarbonisation, all while boosting local supply chains and supporting skilled retrofit jobs,” he added.

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The new projects are expected to support up to 4,000 jobs including local contractors and specialist engineers.

Amanda Murphy, the CEO of the business and commercial banking division at Lloyds, said that universities “play a vital role in driving growth and innovation across the UK” but there were “challenges in funding the significant upfront investment required to decarbonise large complex estates”.

“Our world-class universities make a significant contribution to the UK economy, and this investment will help ensure they remain well positioned for the future,” she added.

tom.williams@timeshighereducation.com