2026 Report · 3rd Annual
Higher Education Energy P3 State of the Industry
Long-term partnership structures used to finance, deliver, modernize, and operate major campus energy infrastructure.
9
Years of tracked activity
37
Colleges & universities
32
Transactions since 2017
0
Deals closed 2025
The State of P3 Higher Ed
The higher education energy P3 market has changed shape.
Using the criteria established for this report, B&D identified no qualifying higher education energy P3 transactions reaching financial close during 2025, the first zero-transaction year in our data set since 2017. Significant activity continued outside the boundaries of our database, however, and 2026 has already produced a noteworthy closing with additional projects advancing through the market.
The first generation of campus energy partnerships demonstrated that private partners could bring capital, operating expertise, and meaningful risk transfer to mission-critical infrastructure. It also exposed limitations in how some early transactions were financed, structured, and procured. The model is improving.
2026 Report Findings
By the Numbers
What qualifies for this report
Zero closings in 2025 should not be interpreted as an absence of campus energy activity. Several notable transactions reached financial close or other significant milestones during 2025 but fell outside the specific inclusion criteria used here.
Unpacking the gap year
A combination of timing, cost, institutional disruption, and market uncertainty
There is no single explanation for why 2025 produced no qualifying closings. The 2025 gap year is better understood as a lagging indicator of a disrupted development cycle than as evidence of a shrinking market.
Pipeline timing
A procurement that might normally take 18 to 24 months stretched considerably during and after the pandemic. A project closing in 2025 would likely have been initiated during 2021 or 2022, when few major energy procurements entered the market.
Cost escalation and rising rates
Projects launched with estimates prepared a few years earlier often encountered materially higher pricing, while rising rates increased borrowing costs and amplified the financing premium.
Leadership transitions and policy uncertainty
Presidential and senior leadership turnover interrupted several efforts. The perception of changing incentives sometimes moved faster than the underlying economics.
Easing, but new pressures
Rates have stabilized somewhat and escalation has moderated. At the same time, rapid growth in data center investment is placing new pressure on electrical equipment, utility capacity, skilled labor, and construction resources.
Financing has improved
The 501(c)(3) structure
For years, one of the most persistent challenges facing energy P3s has been simple: universities can often borrow more cheaply than their private partners. The growing use of nonprofit 501(c)(3) issuers has changed that calculation.
Traditional developer-financed structures have often carried a premium of roughly 150 to 200 basis points over university-issued debt. Recent 501(c)(3) structures have narrowed that difference to as little as 30 to 50 basis points.
That does not make partnership capital cheaper than university debt. It makes the difference small enough that institutions can evaluate the broader value proposition rather than stopping at the financing spread. Henry Ford Health (2025) provided an early reference point for this structure, and the University of Kentucky (2026) subsequently applied a similar approach in higher education.
Converging asset classes
Energy infrastructure is increasingly becoming a platform for institutional growth
In our own advisory work, we are increasingly seeing:
2026 preview
An early indicator of what the next phase may look like
The University of Kentucky project includes a new central utility plant, upgrades to district energy distribution, backup power infrastructure, and modernization and optimization of existing utility systems. UK is advancing the project to provide the capacity and resilience needed for the Chandler Hospital expansion and broader campus growth.
Market snapshot
2025 activity outside the dataset
Cordia and Duquesne University
In March 2025, Cordia acquired central plant distribution assets and amended and extended its existing 35-year energy service agreement. Because the transaction expanded an existing partnership rather than financing a new major infrastructure project, it does not meet this report's inclusion criteria.
University of Iowa Energy Collaborative
In September 2025, the Energy Collaborative refinanced its capital expenditure and working capital facility. Because this was follow-on financing for an existing partnership rather than a new transaction, it is not counted as a 2025 closing.
Thompson Rivers University
In 2025, the Canada Infrastructure Bank and Creative Energy reached financial close on a $50 million financing facility supporting decarbonization and retrofit projects, with TRU serving as the first project under the program.
Strategic considerations for campus leaders
Separate the four decisions
Funding, financing, delivery, and risk allocation are related but distinct. University leaders should understand who ultimately pays, who provides capital, who delivers and operates the system, and who remains accountable for specific risks.
On completeness. This report draws on a mix of public sources, including press releases, disclosures, procurement documents, and other published materials, complemented by direct conversations with institutions, firms, and advisors active in the market. This is a rapidly evolving market, and no single report will capture every transaction or perspective.
What Lies Ahead
The 2025 gap year does not appear to signal a retreat.
The pipeline is rebuilding, financing structures have improved, and progressive procurement is becoming more established. At the same time, aging systems, electrification, healthcare and research growth, and campus-scale digital infrastructure are increasing pressure on utility systems and capital plans.
Tax-exempt financing
Whether 501(c)(3) structures maintain their pricing advantage as more institutions pursue them and market conditions change.
Operating performance
Whether credible data emerges from the 2017 to 2023 transactions on reliability, lifecycle investment, operating performance, and risk transfer.
Electrical infrastructure
Whether growing demand from data centers and other large loads further constrains equipment, utility capacity, and project schedules.
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