NEW YORK — On Saturday, 17 September at the United Nations Transforming Education Summit, world leaders backed the establishment of the first-ever innovative guarantee fund specifically designed to invest in the education of the world’s poorest children and youth—the International Finance Facility for Education (IFFEd).
IFFEd will directly address the devastating global education crisis and learning inequalities that have been exacerbated by the deadly combination of COVID-19, climate change, and conflicts.
It targets the urgent needs of lower-middle-income countries (LMICs) which are home to more than half of the world’s children and youth and where 3 out of 4 young people leave school without the basic skills to thrive.
UN Secretary-General António Guterres said, “The International Finance Facility for Education is aimed at getting financing to lower-middle-income countries—home to half the world’s children and youth—and to the majority of the world’s displaced and refugee children. In time, we expect it to grow into a $10 billion facility to educate tomorrow’s generation of young people. I congratulate Special Envoy Gordon Brown and all the countries and institutions involved in getting this facility off the ground. And I urge all international donors and philanthropic organizations to back it.”
Donor governments and multilateral development banks have come together to launch IFFEd and provide an initial $2 billion in additional affordable funding for education programs to be disbursed starting in 2023. IFFEd could unlock an extra $10 billion of additional financing for education and skills by 2030. The groundbreaking new facility uses a mix of sovereign guarantees and donor grants, to provide affordable education financing. In the current resource-constrained environment, IFFEd is a game changer for both donors and LMICs, as it multiplies donor dollars 7 times as compared to traditional aid.
On Friday, 16 September, more than 100 leading economists and world leaders signed an open letter calling for the launch of IFFEd to transform the lives of millions of children and young people around the world.
Sweden, the United Kingdom, and the Netherlands have been at the forefront of the design of this innovation since the start. The facility is in the final stages of registration in Switzerland.
IFFEd will initially focus on the Asia and Africa regions, in collaboration with the Asian Development Bank (ADB) and the African Development Bank (AfDB), before expanding globally.
IFFEd is a direct response to education budget cuts around the world and the need to leverage scarce resources in the face of compounding crises. From 2019 to 2020, 43 donors reduced their bilateral aid to education, and 40% of low- and lower-middle-income countries reduced their education budgets.
Gordon Brown, UN Special Envoy for Global Education and Education Commission Chair joined the UN Secretary-General and said: “To truly transform education, we need a fundamental shift. Business as usual will not suffice. This is why the International Finance Facility for Education—IFFEd—is such an exciting development for our future generations. IFFEd has the potential to unlock $10 billion in new resources to support half of the world’s most vulnerable children whose pleas to ‘Let Me Learn’ must be heard.”
Countries have underlined the need for IFFEd, and a growing coalition of public and private partners have expressed strong support for IFFEd’s establishment including:
Shehbaz Sharif, Prime Minister of Pakistan: “The recent floods have destroyed over 23,700 schools in our country and have affected 22,000 other schools due to closures, damages, or sheltering families afflicted by the flood damages. The impact on the lives and minds of millions of our children and youth will be felt for years to come. As we work to rebuild from this catastrophe, the new stream of affordable education financing from IFFEd will be crucial to help meet our financing needs to provide an inclusive and quality education for our most vulnerable children and youth.”
Dr. Reda Hegazy, Minister of Education of Egypt: “In Egypt, like in many of our neighboring countries, our education budget is still trying to cope with the increasing number of children enrolled in education. For us, innovative financing is a must to transform our education system. We welcome the International Finance Facility for Education as an international effort to unlock more affordable financing for education and are committed to harnessing IFFEd’s power to deliver new educational opportunities for Egypt’s children and youth.”
Masatsugu Asakawa, President of the Asian Development Bank: “The unprecedented job and learning losses caused by the pandemic require a global coalition and a commitment at scale to mobilize additional financing that will significantly expand support for those in need. ADB is pleased to be a leading partner in taking forward the International Finance Facility for Education initiative in Asia and the Pacific.”
Matilda Ernkrans, Minister for International Development Cooperation, Sweden: “Once approved, Sweden’s guarantee to IFFEd will be our largest guarantee ever within international development cooperation. It will enable innovative finance to increase domestic resource mobilization in exchange for new international funding for education to serve the most marginalized students. Education for all children and youth, leaving no one behind, is a key priority for Swedish development cooperation.”
Liesje Schreinemacher, Minister for Foreign Trade and Development Cooperation, the Netherlands: “The Netherlands welcomes the financial innovation at the heart of IFFEd, which enables donor dollars to reach 7 times more children and young people to benefit from education. By partnering with private and philanthropic funders, IFFEd has strong potential to deliver on critical priorities such as vocational education to prepare young people for work in lower-middle-income countries. These countries face many challenges, including climate change, poverty, and inequality, where the Netherlands combined aid and trade efforts can make a difference.”
Dr. Rajiv J. Shah, President of The Rockefeller Foundation: “Innovations like the International Finance Facility for Education can help ensure we are getting maximum leverage out of each dollar of education funding. By expanding such funding, this facility will scale the solutions humanity needs to make opportunity universal and sustainable.”
Mark Reading, Head of Foundation, Atlassian “We strongly believe in the International Finance Facility for Education and we have put our funding into it to make it happen. We are urging the involvement of other philanthropists and governments because we have to act right now to cut back the terrible losses caused by children being out of school.”
Asif Saleh, Executive Director, BRAC: “As a pioneer in the global south with decades of experience delivering learning opportunities to the world’s most marginalized children, BRAC welcomes this much-needed additional investment in education.”
Liesbet Steer, Executive Director, Education Commission: “Delivering financial innovation such as IFFEd requires courage and perseverance. Our founding partners deserve huge credit for advancing what is perhaps the most significant development finance innovation in the last decade as recognized in the recent G20 MDB Capital Adequacy Framework Review.”