Irish Universities have autonomy to borrow in their own name within a framework to be agreed with the HEA, the Dept of Finance and Dept of Public Expenditure and Reform. Section 38 of the Universities Act, 1997 states that: (1) A university may borrow money by means of bank overdraft or otherwise and may guarantee or underwrite a loan taken or borrowing undertaken by a person or a body of persons. (2) Borrowing, guaranteeing and underwriting under subsection (1) shall be in accordance with a framework which shall be agreed from time to time between the universities and An tÚdarás, following consultation by An tÚdarás with the Minister for Public Expenditure and Reform and the Minister for Finance. The intent of the framework is as follows: That a university can engage in borrowing, underwriting and guaranteeing activities provided that they impose no threat to, and do not create any contingent liabilities for, the public purse. To ensure that the capacity of a university to function effectively is not endangered. That advanced approval by An tÚdarás or the ministers, of individual instances of borrowing, underwriting or guaranteeing by a university would not be required. University borrowing arising from fully self-financed or tax financed projects approved under the Finance Acts, are not subject to the borrowing limit established under this framework and may take place provided the servicing of those borrowings has no impact on the annual income of the University. The HEA provided the below information in relation to University borrowing.: Total University borrowings at 30 September 2021 were €942m Analysed by Lender: Lender EIB; value €618m; Average Interest Rate of 1.1% to 1.9% Lender HFA; value €105m; Average Interest Rate of 1.5% to 2% Lender ISIF; value €21m; Average Interest Rate 4% (Ireland Strategic Investment Fund) Lender Commercial Banks; value €198m; Average Interest Rate 1% to 6%. The purpose of these loans is to fund a range of capital development projects. The original value of these loans amounted to €1,034m. There is no State guarantee or underwriting provided for these loans. While universities are required to submit details of their Framework and non-Framework borrowings to the HEA on an annual basis, the HEA does not have details regarding dates of drawdowns or repayment schedules. There has been no borrowing framework in place for the Technological Universities or Institutes of Technology. Waterford Institute of Technology, now South East Technological University obtained an interest free State loan of €12.1m in 2014 to assist with the purchase of student accommodation and completion of a sports arena. Repayments are €903k per annum. The balance outstanding at 31 August 2021 was €7.2m. The Department has secured agreement to allow TUs borrow. Final arrangements are now being worked on with the TUs.
