The commitment from the International Finance Facility for Education (IFFEd) will address the serious but often forgotten global education crisis. Currently, 250 million children are out of school, while more than 800 million young people – more than half of the world’s youth – will leave school without any skills for the modern workforce.
It will also help bridge the huge education funding gap, which will amount to around $97 billion per year until 2030.
A historic investment
The commitment, which covers the period up to and including 2025, represents “the largest single investment in global education and skills in decades” said Gordon Brown, UN Special Envoy for Global Education, who led the development of IFFEd.
The public-private, non-partisan International Finance Facility focuses specifically on education financing for lower middle-income countries (LMICs), home to 1.2 billion children and youth, or nearly half of the global total.
The LMICs – including India, Pakistan, Nigeria and Kenya – are trapped in the so-called “missing middle”. These countries are no longer eligible for subsidies, but non-concessional financing remains unaffordable, while limited domestic resources mean that education and skills are often hardest hit.
‘Innovative financing at its best’
IFFEd boosts the financing power of multilateral development banks (MDBs) by using a mix of grants and government guarantees in a novel way to increase financing for human capital development.
Every dollar of donor money provides seven dollars in education and skills financing at the country level. As a result, LMICs will be able to prioritize investments in these two areas, even in the face of competing climate, healthcare and infrastructure needs.
Mr. Brown called the $1.5 billion commitment “innovative financing at its best”, which says that “Aligning guarantees with grants and loans offers a way to maximize resources for international development in general.”
He called on “governments and private partners to join IFFEd’s financing innovation, which turns millions into billions to unlock opportunities for the world’s children and youth who need them most.”
© UNICEF/Frank Dejongh
Happy students at a school in the Maasai community in Kajiado County, Kenya.
Transforming millions of lives
IFFEd’s founders, Canada, Sweden and the United Kingdom, have committed $342 million in guarantees and paid-in capital, plus $100 million in grants.
Several global philanthropic foundations have provided critical seed funding, including the Atlassian Foundation, Jacobs Foundation, Porticus, The Rockefeller Foundation, and the Soros Economic Development Fund (the impact investing arm of Open Society Foundations).
“Inspired by Gordon Brown’s vision, I am pleased that we have now reached the point where we can make a positive difference to the life chances of millions of children and young people worldwide,” said Sir Julian Smith, Chairman of IFFEd.
“We look forward to working with our first MDB partner, the Asian Development Bank, to kick off our delivery programme.”
Meanwhile, ten countries in the Asia-Pacific region have been approved as eligible for IFFEd funding: Bangladesh, India, Mongolia, Pakistan, Papua New Guinea, the Philippines, Sri Lanka, East Timor, Uzbekistan and Vietnam.
IFFEd is also actively engaged in discussions with additional donors and other MDBs, including the World Bank and the African Development Bank.
