A $1 billion matching fund for awarding grants to University Grants Committee-funded institutions won the approval of the Legislative Council's Finance Committee. It will be used to match private donations the schools raise.

Secretary for Education & Manpower Prof Arthur Li said he expects the fund will help strengthen the institutions' fundraising capabilities - and their abilities to meet the challenges ahead.

It is also expected to boost the development of  a stronger philanthropic culture in the community towards investment in education.

To encourage healthy competition among institutions, the Government proposes that the University Grants Committee set aside $20 million for matching by each institution as a guaranteed minimum in the first six months after the scheme is open for application.

There will also be a $150 million ceiling applicable to the aggregate amount received by each institution in the first phase of the scheme.

The matching grant scheme will open for application from July 1, 2003. All donations pledged and paid to the committee-funded institutions after March 5, 2003 - when the Financial Secretary first announced the proposal to set up the fund - are eligible for matching grants.

"I appeal to the community for their continuous support to the development of the higher education sector," Prof Li said.