| Notes |
A Powerful New
Engine for Global
Education
—
The International
Finance Facility
for Education
IFFEd Prospectus 2020
This prospectus describes the current
design of the International Finance Facility
for Education (IFFEd). The design is the
result of broad-based consultations that
took place from 2018-2020, including
negotiations among potential donor countries
and participating multilateral development
banks (MDBs) – the African Development
Bank, Asian Development Bank, InterAmerican Development Bank, and World
Bank. As IFFEd begins its operations, work
will continue on developing its policies and
programs, taking into account feedback
and results, including annual progress
reports and independent evaluations. IFFEd
will operate in a transparent manner, and
its policies, reports, and decisions will be
made publicly available on the IFFEd website
to be launched and maintained by the IFFEd
Administrative Unit.
04
06
16
24
36
IFFEd at-a-Glance
The Challenge:
The Global Learning Crisis
A New Response Tool:
The International Finance
Facility for Education
IFFEd’s Potential
Frequently Asked Questions
Contents
4 IFFEd at-a-glance
Substantial new financing and bold reforms are required
to help lower-middle-income countries (LMICs) get
within striking distance of Sustainable Development
Goal 4 (SDG 4). Sixty percent of the world’s learners who
are being left behind live in these countries. Pre-COVID
estimates indicated that LMICs could face a massive
education finance gap of at least $70 billion by 2030,
which cannot be closed by traditional donor grant
finance alone. UNESCO estimates that additional costs
due to COVID-related school closures risk increasing
this financing gap by up to one-third.
IFFEd will help LMICs close this gap and accelerate
progress toward SDG 4, utilizing the financial leverage
of the MDBs and contingent financing from contributors to maximize the impact of donor dollars.
IFFEd offers great value for money. With $1 billion in
contingent financing commitments (of which only $150
million is in paid-in cash) and $1 billion in grant funding,
IFFEd could deliver a total of $5 billion in new education finance.
IFFEd fills a critical gap in the international financing
architecture for education, complementing existing
instruments like the Global Partnership for Education
and Education Cannot Wait by giving LMICs access to
urgently needed, affordable financing for education that
is currently not available to them.
Around 50 countries will initially stand to benefit from
IFFEd, including some of the world’s most populous
countries with large poor and marginalized populations, such as Bangladesh, Kenya, Nigeria, Pakistan, and
Tanzania. The number of eligible countries will grow as
they move from low-income to lower-middle-income
country status.
IFFEd will help countries mitigate the impact of COVID19 by providing a new affordable stream of education
finance in the face of declining revenues and increasing
budgetary pressures.
IFFEd at-a-glance
5 A Powerful New Engine for Global Education: The International Finance Facility for Education
“Education is the most powerful weapon
which you can use to change the world.”
–Nelson Mandela
6
The Challenge:
The Global Learning
Crisis
7 A Powerful New Engine for Global Education: The International Finance Facility for Education
The world is in the midst
of an unprecedented
crisis with devastating
impacts that will be felt
for generations.
Even before the emergence of COVID-19, the
education of the world’s children and youth was
already in crisis – more than 800 million children
(over half of the world’s children and youth) were
either out of school, or in school but not learning
the basics needed to thrive.
The COVID-19 pandemic has magnified the
world’s learning crisis exponentially. At the
height of the pandemic, 1.6 billion children and
youth – more than 90 percent of the world’s
student population in over 190 countries – had
their education disrupted.[1] Almost overnight,
learning has become reliant on connectivity.
But close to half the world’s students don’t have
Internet access.[2] The challenges for 63 million
teachers along with the wider global education
workforce are daunting. More than 20 million
secondary school girls may never return to
school[3] and the impact on the global economy of
lost schooling could be as much as $10 trillion.[4]
The Poorest And Most
Marginalized Children Are At
Greatest Risk
The worst impacts of the crisis will be felt by
the most vulnerable – including the rural and
urban poor, girls, disabled, minorities, and forcibly displaced children and youth. The pandemic
has tragically exacerbated inequalities on multiple fronts – access, learning, social, gender, and
geographical. Children who were out of school
before the crisis and the millions more who are
still locked out and at greater risk of not returning
may be trapped as laborers, child brides, soldiers,
and victims of human trafficking and slavery.
Girls are especially at risk. A child who is out of
school for more than a year is unlikely to return,
and in crisis settings, girls are 2.5 times more
likely to be out of school than boys. Without the
social support that schools provide, girls are
at greater risk of experiencing gender-based
violence and the threat of harmful practices.
[1] COVID-19 Impact on Education. UNESCO
[2] The State of Broadband. Broadband Commission
[3] Girls’ Education and COVID-19. Malala Fund
[4] Simulating COVID-19 impacts on learning and schooling outcomes:
A set of global estimates. World Bank
8
Sounding the Alarm:
Solving the Learning Crisis for
the Future of Work
The Challenge: The Global Learning Crisis
To prepare today’s youth for the workforce of tomorrow,
a robust and resilient education system at all levels –
from early childhood education to secondary school
and beyond – is absolutely essential.
But technology, demographic shifts, globalization, and
the economic shocks from the pandemic are rapidly
reshaping the world. Before the coronavirus crisis, up
to half of today’s jobs – around two billion – were at
high risk of disappearing due to automation by 2030.
Globally, 40 percent of employers were finding it difficult
to recruit young people with the skills needed, and as
the pace of technological change and innovation accelerates, new skills will be required by the labor market.
The pandemic will radically alter what many countries
need to regain or maintain productivity, with a demand
for more and new high-level skills. Working with and
adapting to technological innovations will be vital to
successful employment, and thus ensuring quality
education for all is critical. With the right skills, all young
people can participate in our increasingly global and
digital economy. Recent research shows that human
capital, more than ever before, will be the most critical
determinant to economic success and post-crisis recovery around the world.
Progress is possible. Fifty years ago, Korea, Japan,
Taiwan, and Singapore were behind African levels of
education today. They invested heavily in human capital
and are now thriving in the world economy.
9 A Powerful New Engine for Global Education: The International Finance Facility for Education
Without an education, aspiring doctors, lawyers,
teachers, and innovators will not be able to realize their dreams or help their families, communities, and nations prosper.
In today’s globalized economy and with the
changing nature of work – which prizes skills
in problem solving, adaptation, and innovation
– investments in human capital are more critical than ever. Acquiring 21st century skills starts
with having access to opportunities to learn the
most basic skills necessary to be engaged citizens and productive members of the future workforce. Quality education is vital to lift people out
of poverty, ensure healthier families, advance
racial and gender equality, unlock job opportunities, increase security, and create a more just,
peaceful, and sustainable world.
Lower-Middle-Income Countries
(LMICs) Bear the Brunt of the Burden
The global learning crisis is particularly acute
in LMICs. These countries will have the largest
financing gaps (the gap between what they need
to achieve their education goals and what they
can mobilize from domestic resources). Based
on pre-COVID estimates, LMIC could represent nearly 80 percent of the global education
financing gap by 2030 – estimated at roughly $70
billion per year before the pandemic, and likely
to increase as a result of the crisis.
There are two major reasons for this:
1. The school-aged population in LMICs is large
– 700 million – of whom 155 million were
out-of-school before the pandemic. LMICs
house over half of all school-aged children
and more than half of the world’s poor, as
well as a significant number of refugees and
displaced people. The size and scale of the
education crisis in these countries will grow
dramatically as student populations continue
to expand and populations of disadvantaged children (whether by gender, location,
disability, or poverty level) require additional
investment. Even under the most optimistic
scenarios of increased domestic budgets and
more efficient spending, a financial shortfall in LMICs will persist. Total costs are far
above what education budgets (and households) in these countries will be able to cover.
Despite these large and rising financing
needs, international development assistance
has not kept pace with need. Total global aid
for education is currently only around US$15
billion. This is in stark contrast to other
sectors that have benefited from increased
prioritization in aid budgets. In relative terms,
the picture for education is grim. Aid to education fell as a share of total aid from 13 percent
in 2006 to 10 percent in 2018 (Figure 2). In
comparison, disbursements to both health
and infrastructure grew – in the case of health,
from 16 percent to 18 percent, and in the case
700M school-aged children and youth live in
lower-middle-income countries (LMICs)
school-aged children are out of school
in LMICs
of the world’s out-of-school children are
in LMICs
155M
2/3
9
10 The Challenge: The Global Learning Crisis
“We already faced a learning crisis
before the pandemic… Now we face
a generational catastrophe that could
waste untold human potential,
undermine decades of progress, and
exacerbate entrenched inequalities…
We are at a defining moment for the
world’s children and young people.
The decisions that governments and
partners take now will have lasting
impact on hundreds of millions of
young people, and on the development
prospects of countries for decades
to come.”
— António Guterres,
United Nations Secretary-General
11 A Powerful New Engine for Global Education: The International Finance Facility for Education A Powerful New Engine for Global Education: The International Finance Facility for Education
IFFEd: An Opportunity to
Mitigate COVID-19’s Impact
on Learning
History shows that sustaining funding for human development programs is especially challenging during
financial crises. The International Finance Facility for
Education (IFFEd) will help sustain and increase investments in education so that the critical learning needs
of the most marginalized children do not fall through
the cracks as governments grapple with the health and
economic impacts of the COVID-19 pandemic. IFFEd
will provide LMICs access to affordable financing for
education without having to make trade-offs against
health and other vital social programs. IFFEd will maximize the impact of donor dollars for the countries
whose education systems are likely to be most affected
by the pandemic.
LMICs are being hit very hard by the pandemic due
to their heavy reliance on external, volatile private
sources of finance, more so even than some low-income countries which tend to rely more on grants and
concessional finance from donors. Public revenues are
projected to plummet just as countries face intense
public spending pressure to protect jobs, strengthen
social safety nets, and meet health care demands.
Unlike more advanced economies, LMICs will not be
able to mount strong fiscal responses on their own –
they will be unable to borrow cheaply from commercial
markets or issue local currency without risking inflation,
an exchange rate crisis, or both. As a result, demand for
official development finance is likely to escalate quickly
and sharply.
The crisis will squeeze financing for education further
and exacerbate inequalities. With higher than average
rates of population growth, simply protecting existing
education budgets in LMICs won’t be enough. During
the West Africa Ebola outbreak in 2014-15, schools
were closed for months, affecting some 5 million
children and depriving them of lifesaving health and
nutritional services. Dropout rates, especially for girls,
rose dramatically. A World Bank assessment found
that the 2008 financial crisis compounded the learning
crisis, especially for poor and marginalized families.
Vulnerable groups were disproportionately affected as
parents took their children out of school, either because
of costs or the need to put them to work. Some governments raised school fees to compensate for declining budgetary resources, creating additional financial
burdens on families when they could least afford it.
IFFEd can help safeguard education budgets and development goals. IFFEd was designed as a cost-effective,
innovative financial instrument that will enable LMICs
to access affordable financing through the MDBs. IFFEd
will enable the MDBs to increase their country allocations above what they offer without IFFEd – a critically
important feature as MDB balance sheets are increasingly stretched as a result of COVID-19. This will allow
LMICs to protect education investments without having
to make unacceptable trade-offs with other crucial
development priorities like health. In addition, IFFEd
will subsidize the already low rates attached to MDB
financing, just as other sources of affordable financing
for LMICs are becoming more costly.
12
Figure 1: Total ODA disbursements from all donors to all developing countries, by sector, moving three-year averages. [5] Billions, Constant USD
Infrastructure Health Education
35
30
25
20
15
10
5
0
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
12 The Challenge: The Global Learning Crisis
of infrastructure, from 19 to 24 percent. The
pandemic could lead to contractions of more
than 10 percent in aid to education.
2. The existing global education aid architecture is not designed to meet the unique and
outsized needs of LMICs. There is a mistaken
assumption that, as LMICs grow their economies, governments are able to finance education systems through increased domestic
revenues and thus targeted international
funding is not necessary. But as countries
transition to LMIC status they lose access to
concessional financing at a faster pace than
tax revenues increase, and governments
must make difficult choices around allocating
increasingly scarce funds among all sectors.
Often these choices come at the expense of
social sectors, where spending is first to get
cut. Despite strong and growing evidence
on the links between investments in human
capital and growth, governments too often
prioritize funding for infrastructure, energy,
or other priorities that deliver measurable,
short-term returns.
The global economic crisis caused by the COVID19 pandemic will require policymakers to make
even tougher choices for years to come in the
face of diminishing revenues and escalating
needs. This could affect education spending
even further, making IFFEd even more critical
for recovery (see p.11 – IFFEd: An opportunity to
mitigate COVID-19’s impact on learning).
IFFEd will help ensure there is sufficient, flexible,
long-term funding for this vital sector and ease
pressure on immediate spending when budgets
are especially constrained.
[5] Source: OECD-DAC creditor reporting system
13 A Powerful New Engine for Global Education: The International Finance Facility for Education Share of Sectoral ODA (%)
Infrastructure Health Education
30%
25%
20%
15%
10%
5%
0%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
Figure 2: ODA disbursements as a share of sectoral ODA, by sector, moving three-year averages.
Indispensable international programs such
as the Global Partnership for Education (GPE)
and Education Cannot Wait (ECW) are already
stretched focusing on children living in the very
poorest countries or emergency humanitarian
settings, and they were not designed to address
LMICs’ unique, large, and long-term education
financing needs. IFFEd would thus address an
unmet need in the international aid architecture
by providing LMICs with longer-term sustainable financing to help achieve universal quality
education – SDG 4. IFFEd helps stabilize education financing by allowing LMICs to continue
accessing international funding on concessional
terms as they did when they were low-income
countries (LICs). By providing affordable concessional financing, these countries can continue
investing in their education systems during this
critical stage of their development.
Without urgent international action to close the
education gaps in LMICs, more than half of all
young people in the world will not have the most
basic skills necessary to be engaged citizens or
productive members of the global workforce
in 2030. This generation – and their children’s
generation – will be trapped in a vicious cycle
of poverty, and the SDGs will be far out of reach.
This is morally unacceptable and poses an enormous threat to the well-being of humanity and
the future of our planet.
14 The Challenge: The Global Learning Crisis
Sources: UNESCO Institute for Statistics; Education Commission (2016); United Nations World Population Prospects: The 2017 Revision
The Scale of the
Financing Gap by 2030
Many LMICs will need to multiply current levels of domestic spending many times over by 2030 to cover escalating education costs.
This is a difficult path, particularly since many of these countries
are already spending close to or above the international benchmark
for spending on education as a share of government expenditure –
20 percent – as endorsed in the Education 2030 Framework for
Action. These countries are home to millions of school-aged children
that are at risk of being left behind. IFFEd provides a new path forward
by providing additional financing for education at affordable terms,
while also catalyzing MDBs’ help to countries to increase domestic
revenues and enhance the effectiveness of spending.
Illustrative list of how much select LMICs will need to multiply current
spending to meet 2030 education financing needs and current share
of total national budgets spent on education.
2x
0.2M 22.8%
2.7x
School age population,
2015
3x
22M 14.5%
Government expenditure
% on education
Current spending
multiplier required for
2030 needs
1.9M
2.2x
20M 19.1%
3.6x 3.7x
17.9%
9M 23%
3.2x
15 A Powerful New Engine for Global Education: The International Finance Facility for Education
5.3x
4.4x
6x
6.8x
23M 20.6%
4x
6M 21.5%
4.5x
67M 14.5%
5x
9.6M 18.3%
6.5x
4.5M 17.7%
4.4x
7M 17%
6.4x
51M 14.6%
16
A New Response
Tool: The
International Finance
Facility for Education
17 A Powerful New Engine for Global Education: The International Finance Facility for Education
The International Finance
Facility for Education
(IFFEd) will be a powerful
new financing engine for
global education.
IFFEd is specifically designed to tackle the
massive education crisis in LMICs at minimum
cost with maximum leverage.
IFFEd fills a critical gap in the international
financing architecture for education. By using a
combination of catalytic grants and contingent
financing (guarantees), and multiplying scarce
donor resources, investing in IFFEd will enable
international donors to help close the massive
education financing gap in LMICs without
having to reduce their existing support for other
programs that support education in low-income
countries or humanitarian settings.
In its landmark 2016 Learning Generation report,
the Education Commission – composed of
current and former heads of state, ministers of
finance, and top global business and education
leaders – looked at ways to improve learning
outcomes around the globe. One of the report’s
key recommendations was the creation of a new
international finance facility for education. The
Commission determined that MDBs are best
placed to increase the volume and effectiveness
of investments in education, but financial incentives are needed to address the serious supply and
demand constraints that exist.
The G20 Eminent Persons Group on Global Financial
Governance cited IFFEd as an innovative example
of how to address gaps in the international financial architecture without creating parallel or
duplicative structures. IFFEd will work through
the existing MDB structures and will require no
new in-country actors, promoting greater country ownership and efficiency.
IFFEd is a new education financing engine the
world needs at this critical time.
A Smarter Way to Finance Education
IFFEd funding will enable MDBs to significantly
increase their support to LMICs for education,
and allow LMICs to secure education financing at
more affordable rates. Although the MDBs lend
significant amounts every year, these resources
only finance a fraction of what LMICs need for a
broad range of priorities like transport, housing, energy, agriculture, health, climate, and
education. IFFEd will make it possible for LMICs
to increase financing for education through the
MDBs without having to make these trade-offs.
Donors can contribute to IFFEd in two ways,
through a guarantee window and a grant window:
Contingent Commitments (Guarantees)
When a new education investment is submitted to
IFFEd, the Facility will provide a guarantee to an
18 The Solution: The International Finance Facility for Education
Four Core Design Principles
1. Quality IFFEd will ensure that the government-led
education programs it finances are aligned with quality
country plans, well-designed, and operate with a robust
results framework focused on sustainable outcomes.
IFFEd will work through the MDBs, which have established track records of strengthening education
systems, improving learning outcomes, and working with countries to improve data and knowledge
products. IFFEd will be subject to periodic independent evaluations, the first at the end of the first five
years of operation.
2. Equity IFFEd will strive to reduce disparities in education in LMICs – which house the greatest numbers
of the world’s poor and the majority of out-of-school
children and youth – by focusing on the inclusion
of the most at-risk populations, in particular the
poorest, girls, disabled, and displaced. By providing
access to schooling, IFFEd will reinforce the virtuous
cycle associated with learning – reduced poverty,
better health outcomes, and reduced maternal and
child mortality.
3. Collaboration IFFEd will enhance collaboration and
integration of the multilateral system by working
only through the MDBs, augmenting their education programs. It will not create a costly competing entity that engages directly with countries.
IFFEd will also foster cooperation and joint learning
among the MDBs by establishing the first joint-MDB
mechanism focused on education to share lessons
and knowledge on project approaches and outcomes.
IFFEd will coordinate closely with GPE, ECW, UN
agencies, and other international partners to
accelerate overall progress in global education.
IFFEd reporting and information sharing on IFFEdfinanced programs and the MDBs’ education portfolios will contribute to better funding alignment in
education.
MDBs will follow their procedures and safeguard policies to ensure consultation with CSOs and other interested stakeholders at the country level in the design
and monitoring of IFFEd-financed programs.
4. Financial Efficiency With its leverage factor
of five dollars of MDB educational lending for
one dollar of IFFEd contingent financing, IFFEd
will multiply scarce resources as called for in
the “billions to trillions” paradigm shift and the
Addis Ababa Financing for Development Declaration.
IFFEd will be administered by a small team and be
self-sustaining; all running costs will be covered by
its revenue stream.
19 A Powerful New Engine for Global Education: The International Finance Facility for Education
Rising debt burdens in many developing countries
are spurring concerns of a looming debt crisis. While
much of the concern has focused on LICs, the impact
of additional borrowing by LMICs as a result of IFFEd
also needs to be taken into account.
The additional financing that IFFEd would support is
minimal as compared to the total debt burden of LMICs.
LMICs had nearly US$1.7 trillion net outstanding debt at
the end of 2018. In comparison, IFFEd would support,
at most, an additional US$4 billion in borrowing over
five years, an increase of about 0.2% of their total debt
stock. Country-by-country analysis indicates that many
LMICs at the end of 2018 with both significant financing
needs for education and sustainable debt burdens could
absorb all of IFFEd’s resources. Growing LMIC debt
burdens have not been driven by MDB loans but by other
sources, such as private, more expensive borrowing. By
2018, LMICs secured approximately $495 billion dollars
in private debt – up from about $255 billion in 2010.
Nevertheless, given the potential risks of debt distress
in some LMICs and future uncertainties, particularly
with the COVID crisis, IFFEd’s design includes important additional safeguards, including a requirement that
MDBs conduct a debt sustainability analysis of potential
client countries in line with the IMF framework before
IFFEd support is provided. IFFEd also requires countries
to make commitments on domestic sources of funding
for education.
The low debt sustainability risks are far outweighed by
the benefits of smart investments in education, given
education is one of the best bets in development and a
key leverage point for accelerated growth and progress
on all of the other SDGs.
Education Investments Create
Value: IFFEd’s Impact on Debt
Sustainability in LMICs
20 A Powerful New Engine for Global Education: The International Finance Facility for Education
MDB to cover a share of any missed repayments
by their client countries for the MDB’s portfolio
of investments, effectively providing MDBs with
a new form of hybrid capital. This hybrid capital will allow the MDB to raise additional funds
on the capital markets, leveraging the amount
of hybrid capital four times, to finance additional education investments. Donors will only
provide IFFEd with 15 percent of their contingent commitments in an up-front cash payment,
with the remaining 85 percent of the commitment being provided in the form of a contract
to convert commitments into cash if needed
to maintain the financial stability of IFFEd.
Experience over the past 20 years indicates it is
highly unlikely that the guarantee commitments
will need to be converted into cash.
Grants
IFFEd will provide grants through participating
MDBs to help lower the cost of education financing packages to eligible countries thus allowing
LMICs to finance education on more affordable terms. Between 2015 and 2017, 12 percent of
concessional MDB lending for LMICs was taken
up for education, compared to just 2.5 percent of
non-concessional (market-based) lending.
The amount of IFFEd grant funding to be blended
with an IFFEd qualifying education loan to an
eligible country will depend on each country’s
unique economic situation, ability to access
other sources of concessional finance, and debt
sustainability ratio, which will evolve as their
economies grow.
Leverage, Reach, and Scale: An
Exceptional Value for Donors
IFFEd embodies the aims of the Addis Ababa
Financing for Development Framework, which
emphasizes the need to scale up domestic
resource mobilization and move from “billions
to trillions” to finance the SDGs.
IFFEd offers great value for money. With the
targeted amounts of US$1 billion in guarantees
(comprised of US$150 million in paid-in cash
and US$850 million in contingent commitments)
and $1 billion in grants over its initial five-year
programming period, IFFEd could deliver a total
of $5 billion in new finance for global education.
IFFEd’s partnership with the MDBs will supercharge progress towards SDG 4 – inclusive,
equitable, and quality education for all. As the
largest external financiers of education in LMICs,
the MDBs have the technical and financial capacity to deliver quality education programs at the
Traditional Aid for Education
$100M $100M
Contribution
Traditional aid is essential, especially in the poorerst
countries. Every $1 of committed aid leads to $1 in
education services.
Investment Benefiting
21 A Powerful New Engine for Global Education: The International Finance Facility for Education
needed scale. As AAA-rated development banks,
their ability to leverage additional resources
from IFFEd’s capital support makes them natural partners to maximize scarce donor funding.
Their cross-sectoral approach to development
enables them to address major policy constraints
to education outside the sector, such as public
financial management, health, and social protection. And MDBs are well-placed to ensure this
additional financing delivers the intended results
(see pg.26- MDB impact stories).
IFFEd will incentivize domestic resource mobilization for education. A country receiving
support from IFFEd will be expected to increase
its domestic spending on education in line with
international standards. Each participating MDB
will be expected to show that its education portfolio grew as a result of the additional funding
made available through IFFEd.
Cost-Efficient
IFFEd will serve as a source of new financing
for education, and not as a policy or implementation agency. IFFEd’s priority is to build
on the existing capacity of the MDBs and
avoid fragmentation in the global education
architecture. Relations with countries will be
managed by the MDBs active in each country,
who are already trusted development partners. As such, IFFEd is a light-touch financial
instrument and contributes to the planning
processes that already take place at the country
level through education sector planning and
other government-led planning activities.
IFFEd’s lean administrative unit will have a
small staff and be financed entirely by its own
revenue. An independent board of directors will
provide oversight and a contributor’s meeting
$100M
Contribution Total Investment: $500M
Guarantees
The International Financial Facility for Education
Grants
$100M $100M
leverages gaurantees
Development bank $400M
Grants soften terms
of finance
Benefiting
5x the Impact
By combining guarantees and grants, every $1 of
committed aid leads to $5 in education services.
22 A Powerful New Engine for Global Education: The International Finance Facility for Education
with IFFEd donors will review and advise on the
strategic achievement of IFFEd’s goals against
the SDG 4 targets. The IFFEd Board will approve
initial indicative allocations to the participating MDBs for the first five years of operation,
which will be reviewed annually for efficiency
and effective use of IFFEd resources. The participating MDBs will work with eligible countries to
identify education projects to be funded within
the scope of their respective allocations.
Results-Focused
IFFEd aims to address an unmet need in the
international aid architecture by providing LMICs
with longer-term, predictable, and sustainable
financing to help achieve SDG4. IFFEd’s results
framework will monitor and track equity, additionality, sustainability and impact of its investments towards delivering inclusive and quality
education for all children.
An investment case (or rationale) for a proposed
MDB qualifying education loan will explain how
the country in which the investment is to be made
meets the IFFEd eligibility criteria (see section
below) and how the investment is consistent with
the programming expectations and outcomes
laid out in IFFEd’s results framework (see
Section III). Investment cases will be submitted
to the contributors’ meeting for review and to
the independent IFFEd Board for endorsement
of the proposed allocation of IFFEd resources.
Once a proposal is endorsed by the IFFEd Board,
it will follow the participating MDB’s own policies and procedures for project approval and
implementation.
Participating MDBs will report annually on the
progress of the qualifying education programs
and projects they are supporting through IFFEd,
how they have addressed the eligibility criteria
and programming expectations, the expected
results being achieved in line with IFFEd’s results
framework, and their overall trends in lending
for education. IFFEd will then prepare a comprehensive annual report detailing its contributions
to SDG 4 which will be publicly available on the
IFFEd website.
IFFEd Will Benefit LMICs
Committed to SDG 4
Countries eligible to seek funding from IFFEd
are those classified by the World Bank as LMICs
– with average per capita income ranging from
approximately US$1,000 to less than $4,000 per
year. This includes several of the world’s most
populous countries with significant poor and
marginalized populations. The number of IFFEdeligible countries may grow as more countries
enter LMIC status over time. 1
To be eligible for support from IFFEd, LMICs will
need to demonstrate:
· a credible strategic education framing document, such as a national education sector plan.
· a commitment to improving education opportunities for marginalized children consistent with the SDG principle of “leave no one
behind.”
· a commitment to increase their domestic education budget to meet international
standards – e.g. the Incheon Declaration and
Education 2030 Framework for Action recommended spending on education to reach 6
percent of GDP and 20 percent of national
budgets.
· a debt sustainability analysis demonstrating increased borrowing capacity – IFFEd will
not place any countries at risk of debt distress.
IFFEd will instead increase the affordability of MDB lending by combining grants with
loans, significantly reducing borrowing costs.
Each MDB will retain flexibility in determining the specific grant element for any individual financing package. This will allow
Participating MDBs to differentiate between
countries, taking into account differences in
debt sustainability prospects and demand for
borrowing for education.
· a demonstrated commitment to resultsbased approaches to achieve nationally-owned
targets, consistent with the Paris Declaration
on Aid Effectiveness.
[1] The World Bank updates its income classifications every year on
July 1.
23 A Powerful New Engine for Global Education: The International Finance Facility for Education
Measuring Impact:
IFFEd will have a
robust results framework
that will track the
contribution of IFFEd
financing for activities
at the country level to
aggregated outputs,
outcomes, and impacts.
IFFEd indicators are harmonized with key SDG
goals and will measure, among other things:
• Improved inclusiveness by reporting on:
| the number of children and youth
enrolled at each education level disaggregated for marginalized groups where
data is available (and including income
quintile, sex, rural-urban and disability)
| the extent to which education is free and
compulsory; and
| the extent to which integrated basic
education is guaranteed for students
with disabilities.
• Improved quality and learning by
measuring:
| proficiency levels in reading and math of
children and youth; and
| the number of teachers recruited and
trained under IFFEd-funded programs.
• Increased prioritization of education by
reporting on government spending on
education as a percentage of GDP and of
total government expenditure.
To facilitate the evaluation of results, each
MDB will report annually on progress and
results, including reporting on core indicators
of IFFEd’s Results Framework and other project
level indicators. In addition, periodic independent evaluations of IFFEd will provide an objective assessment of IFFEd’s results, impact, and
efficiency.
The draft IFFEd Results Framework can be found
here.
IFFEd’s potential
25 A Powerful New Engine for Global Education: The International Finance Facility for Education
In light of the pandemic
and the inevitable loss
of learning for hundreds
of millions of children
and youth – especially
girls – the international
community must act
urgently to protect and
maintain investments
in education.
By multiplying donor resources and motivating
countries to increase their own investments,
IFFEd will generate new funding streams for
education and help mitigate COVID-19’s impact
on learning.
History shows that innovative and concerted
global financing efforts can have profound
human and economic impact. Nearly two
decades ago, such cooperation led to the creation
of the Global Fund to Fight AIDS, Tuberculosis
and Malaria, and GAVI, the Vaccine Alliance, both
of which have channeled billions of dollars into
the health sector and saved tens of millions of
lives. In more recent years, global climate change
agreements from Copenhagen to Paris, as well as
the creation of the Climate Investment Funds and
the Green Climate Fund, have transformed funding for climate mitigation and adaptation and
catalyzed billions in new market opportunities.
The Fierce Urgency of Now
There is still much uncertainty about the full
devastation of COVID-19. But what we do know
for certain is that the poorest and most marginalized are the ones whose lives will be damaged
most and the education, hopes, and futures of an
entire generation are at risk.
Although education is clearly a victim of the
pandemic, it is also a critical part of the solution
to the longer-term recovery from COVID-19.
With IFFEd, the world now has a bold, cost-effective solution to help provide a quality education to the 700 million school-aged children
living in LMICs. By investing in IFFEd, donors
will help close the large education financing gap
in LMICs and create a generation of children who
can realize their full potential regardless of the
lottery of their birth. The payoff for humanity
and the global economy will be significant and
the failure to act is unconscionable.We cannot –
and must not – fail this generation.
26 IFFEd’s Potential
3
4
1. Pg. 28
Giving Young Girls a Second
Chance in Zanzibar
2. Pg. 29
An Education Lifeline: Textbook
Support in Mongolia
3. Pg. 30
Partnering with Elmo and the
Cookie Monster to Support Young
children in Latin America
4. Pg. 32
Bono Vida Mejor in Honduras:
Boosting School Enrollment with
Conditional Cash Transfers
5. Pg. 33
The Inclusive Education
Initiative: Rethinking Education
for Children with Disabilities
Impact Stories from
the MDBs
27 A Powerful New Engine for Global Education: The International Finance Facility for Education
Impact Stories from
the MDBs
1
5
2
28 IFFEd’s Potential
1. Giving Young Girls a Second Chance in
Zanzibar
Like many girls in Zanzibar, Hadia was never enrolled
in the formal education system. At age 13, she had
the opportunity to attend the Raha Leo Alternative
Centre, an alternative learning center, as a pathway to
catch up and give herself a chance of success in life.
Tanzania’s alternative learning and skills development centers were constructed with an African
Development Fund (ADF) loan and grant totaling
US$32.7 million. Designed to fill the gaps in non-formal education in Zanzibar, the project also financed
the development of teachers’ manuals and purchase
of equipment. The centers are providing basic education and other skills to more than 2,000 students and
training in computer literacy, law, and adult literacy
to more than 1,000 community members (more than
half of whom are women).
Under the Small Entrepreneurs Loan Facility (SELF)
scheme, more than 6,000 interest-free micro-loans
were given to graduates – 70% of them young
women – to start their own businesses. SELF also
supported 19 microfinance institutions and Savings
and Credit Cooperatives.
The alternative learning centers continue to advance
literacy, numeracy, and basic education curricula and
programs for dropouts and out-of-school children
who have never been enrolled in the formal school
system and supports the Government of Zanzibar’s
high priority on the development of alternative basic
education with an emphasis on girls.
African Development Bank (AfDB)
"If I hadn't come to
this center, I would
have spent my life
doing domestic work.
Now, I can read and
write. I'm sure that
once I've finished my
studies, I'll be able
to set up my own
business. I'm so glad
to have studied here."
—Hadia Baruti Wimbi
29 A Powerful New Engine for Global Education: The International Finance Facility for Education
2. An Education Lifeline: Textbook Support
in Mongolia
In the face of severe economic difficulties in 2019,
Mongolia’s Ministry of Education, Culture, Science
and Sports (MECSS) asked ADB to fund textbook
procurement and printing. The Government of
Mongolia was unable to secure sufficient funds
for textbook development and urgent support was
needed for students using textbooks for learning in
the classroom and beyond. With the use of project
savings, the initiative rapidly supported the printing and distribution of textbooks for students from
sixth to twelfth grade. In total, more than 2.7 million
textbooks were printed for 19 subjects including
Mongolian, mathematics, sciences, English, Kazakh,
history, information and technology, and music.
Textbooks were distributed to 649 out of a total of
757 public and private schools in October-December
2019. More than 70,000 students (over half of them
girls) are using the textbooks.
Due to COVID-19, all schools have been closed in
Mongolia since February 2020, affecting nearly 1
million students. MECSS introduced tele-teaching
with the use of textbooks and programs on four TV
stations. With support from MECSS, selected teachers in Ulaanbaatar are preparing lesson plans following the national curriculum. The textbooks are an
education lifeline for students learning from home,
given the current crisis situation.
Asian Development Bank (ADB)
30 IFFEd’s Potential
3. Partnering with Elmo and the Cookie
Monster to Support Young Children in
Latin America
With the closure of early childhood development
centers and preschools in the wake of the COVID19 pandemic, young children are among the most
affected by the interruption in access to learning
opportunities, and by the temporary loss of the safe
spaces offered by school environments. Experts
warn of long-lasting effects on young children’s
socioemotional and cognitive development as learning has shifted from school rooms to living rooms.
To support children and caregivers across Latin
America, Sesame Workshop (the non-profit organization behind Sesame) and the IDB have partnered
to provide resources to help transform moments of
uncertainty into learning opportunities. Thanks to
the Sesame-IDB partnership, all countries in Latin
America and the Caribbean will have free access to
more than 100 hours of the best Sesame television
programming until June 2021. This will ensure that
all preschool girls and boys can continue learning at
home through public and private television networks,
as well as webpages of ministries of education
throughout the region. In parallel, families can also
write directly to Sesame via WhatsApp to receive free
learning resources and tips directly on their phones.
A website provides families with videos, digital
games, activities, storybooks, and other materials
to cope with the crisis – from how to properly wear
a mask to breathing and yoga techniques to manage
frustration and anxiety.
Rigorous evaluations, conducted by the IDB and
others, indicate that Sesame’s content delivers the
academic building blocks required to initiate shortand long-term learning, raise levels of creative thinking, and reduce gender stereotyping.
Inter-American Development Bank (IDB)
31 A Powerful New Engine for Global Education: The International Finance Facility for Education
4. Bono Vida Mejor in Honduras: Boosting
School Enrollment with Conditional Cash
Transfers
In 2010, the World Bank extended financing to
Honduras established a new delivery system for its
Conditional Cash Transfer Program, providing cash
transfers to 234,000 extremely poor households
in rural areas, 90 percent of which are headed by
women. The new system helped reduce the nation’s
poverty gap and increased school enrollment. The
Conditional Cash Transfer Program (now known as
Bono Vida Mejor), provides cash to extremely poor
households, with the amount provided dependent
on the number and age of children in the household.
A program evaluation in 2017 found that primary
school enrollment among program beneficiaries
increased by 7 percent, and enrollment in upper
secondary school (sixth to ninth grades) increased
by 10 percent. In addition, the number of children
engaged in child labor declined by 20 percent.
The World Bank
32 IFFEd’s Potential
5. The Inclusive Education Initiative:
Rethinking Education for Children with
Disabilities
Children with disabilities are among the most marginalized and excluded from education around the
world. Pre-pandemic, at least half of the estimated
65 million primary and secondary school-aged children with disabilities were out of school. The COVID19 crisis has only exacerbated this exclusion.
The Inclusive Education Initiative (IEI) was launched
in 2019 by the World Bank with support from the
United Kingdom’s Foreign, Commonwealth and
Development Office (FCDO) and the Norwegian
Agency for Development Cooperation (NORAD) to
provide technical expertise and resources to help
countries foster more inclusive educational systems,
with a view to achieving SDG 4.
In just one year, the IEI has already started to influence the progress of disability-inclusive education.
The initiative is supporting three pilot countries
– Nepal (US$ 1.93 million), Rwanda (US$ 1.90
million), and Ethiopia (US$ 2.0 million) – to expand
their disability-inclusive education portfolio. The
programs for each pilot emerged from robust
engagement and inputs from a range of stakeholders, including ministries of education, social development, social welfare, Local Education Groups,
inclusive education working groups, and consultation with disabled persons’ organizations and civil
society organizations.
The IEI works with World Bank country teams,
UNICEF, and other stakeholders to: narrow the
disability data gap by providing grants to develop
inclusive information systems, surveys, screening
and assessment tools; close the disability research
gap by commissioning comprehensive reviews of
Photo: wavebreakmedia / Shutterstock
The World Bank
33 A Powerful New Engine for Global Education: The International Finance Facility for Education
resource classrooms and assessment centers to better
articulate the critical elements of inclusion; address the
capacity gap by training teachers on screening, assessment, and disability-inclusive education sector analysis
and planning; and tackle the innovation and knowledge
gap by providing grants to disrupt learning practices for
children with disabilities and prepare them for lifelong
learning.
The IEI Disability-Inclusive Education Community of
Practice and Knowledge Hub was established to address
the need for a knowledge-sharing platform focused
exclusively on disability-inclusive education that deepens the conversation around challenges, good practices, gaps, and implementation issues. In July 2020,
the IEI released the Issues Paper Pivoting to Inclusion:
Leveraging Lessons from the COVID-19 Crisis for
Learners with Disabilities.
34 IFFEd’s Potential
“Good quality, holistic, inclusive
education is a key driver of opportunity,
empowerment and social justice. If we
are truly to achieve our shared vision of
social justice and equality, then we must
invest and invest NOW in education
for children and youth throughout
the world. The International Finance
Facility for Education has the power to
mobilize significant new funding for
education and direct it to the countries
with the largest number of marginalized
children and adolescent girls in
need of a future-focused, 21st century
education. Young people have shown
that they can lead amazing social change
– let’s make sure we maximize their
potential.”
— Theo Sowa, CEO, African Women’s
Development Fund
35 A Powerful New Engine for Global Education: The International Finance Facility for Education
IFFEd will be operational in a large number of countries
where gender gaps in schooling persist. More than
half of the worldwide female out-of-school population
lives in LMICs, and one of IFFEd’s explicit priorities is to
focus on marginalized children and youth with particular
reference to the poorest, girls, disabled, and forcibly
displaced children and young people. The draft IFFEd
Results Framework makes this priority concrete by
requiring that both outputs and outcomes indicators
are disaggregated by gender and aligned with the SDG
indicators.
Educating girls leads to better health outcomes and
saves lives. The Learning Generation Report found that
a child whose mother can read is 50 percent more likely
to live past the age of five, 50 percent more likely to be
immunized, and twice as likely to attend school.
There is also growing evidence that expanding girls’
education can play a role in helping countries mitigate
and adapt to climate change. Girls’ education has a
proven link to lowering fertility rates and reducing population growth, one of the key drivers of climate change.
Data from the Brookings Institution suggest a strong
positive association between the average amount of
schooling a girl receives in her country and her country’s score on indexes that measure vulnerability to
climate-related disasters.
Girls’ Education: A Powerful
Driver for Healthy People and
a Healthy Planet
120%
90%
60%
30%
0%
Under Five Female Male
Educating Girls Saved over 130 Million Lives — Declines in Mortality Rates (per 1000) in low- and middle-income countries
(1970-2010)
Decline in mortality rates
Percentage decline
attributable to female
schooling
Percentage decline
attributable to income
growth
Percentage decline
attributable to
technological change
36
Frequently Asked
Questions
37 A Powerful New Engine for Global Education: The International Finance Facility for Education
What is this new finance mechanism?
• IFFEd is a new, innovative financing facility designed to
help close the chronic education funding gap in LMICs
and support achievement of SDG 4 – ensuring inclusive, quality education and lifelong learning opportunities for all.
• IFFEd is also a robust response to the call for new
financing initiatives under the Addis Ababa Action Plan
to finance the SDGs and leverage “billions to trillions.”
• The Facility will increase the capacity of the MDBs to
finance education in LMICs by providing them additional lending headroom for education projects and
improving the concessionality of the education financing packages for eligible countries beyond what the
MDBs can currently offer them.
• COVID-19 brings new urgency to the Facility, as eligible countries are facing severe budget constraints that
will make it difficult to protect education budgets. The
World Bank reports that education spending is likely to
stagnate or fall in some countries due to budget deficits
caused by the crisis.
How will IFFEd work?
• The Facility will provide incentives to both the MDBs
and LMICs to scale up investments in quality education programs by:
• Providing MDBs with additional hybrid capital (based on a combination of paid-in cash and
contingent commitments provided by donor countries to partially underpin the performance of the
MDBs’ sovereign loan portfolios). This additional
hybrid capital will enable the MDBs to increase
their lending to lower-middle-income countries
for education.
• Offering grants to eligible countries to soften the
terms of the financing package to make education
financing more affordable.
• IFFEd will also require eligible countries to have a
credible education plan, commit adequate domestic resources in support of this plan, and integrate a
results-based approach.
• IFFED is not a policy or implementing agency. There will
be a lean structure composed of a small administrative
unit to oversee the facility. The World Bank is expected
to initially serve as trustee of the IFFEd Trust Fund.
Why do we need another initiative for
education?
• There is an urgent, well-documented crisis in learning
and education. This crisis is being exacerbated by the
global pandemic.
• Addressing this crisis is critical if we are to safeguard
recent gains and advance the goals of SDG 4 and prepare
the next generation to meet the demands of the 21st
century workforce.
• IFFEd will address an important gap in the global
development architecture by enabling LMICs to scale
up investments in education. Their financing needs
cannot be addressed by grant aid alone.
• LMICs house most of the world’s poor and out-ofschool children and have the largest financing gaps to
meet their education needs, but are ineligible for most
grant and concessional financing programs. They are
also facing severe financial shocks in the wake of the
pandemic, due to a decline in revenues from sources
like exports and tourism, as well as reduced access to
markets.
How will this new mechanism complement
other initiatives?
• IFFEd is unique because it is designed to help LMICs
– which house most of the world’s poor – address
chronic, unmet needs in education finance. Other
signature education initiatives target lower income
countries and countries in crisis.
• MDBs, supported by IFFEd, will work alongside international actors such as the Global Partnership for
Education (GPE); the Education Cannot Wait Fund
(ECW); United Nations agencies such as UNICEF,
UNHCR, and UNRWA, national donors; and civil society.
• IFFEd is not a delivery or implementing agency. Its
implementing partners will be the MDBs, which are
important providers of programmatic and technical expertise in education and have established track
records in improving learning outcomes.
• IFFEd will also foster and support MDB collaboration
and cooperation on education.
Why is this initiative focusing on LMICs and
not on the poorest countries?
• There are several major education initiatives that
provide grant financing for education needs in the
poorest countries. But the largest, most pervasive, and
38 Frequently Asked Questions
chronic unmet education financing needs are in LMICs,
which house the vast majority of the world’s poor.
• Sixty percent of all children and young people who are
projected to lack basic skills by 2030 reside in LMICs.
These countries will fall far short of their social and
economic potential without major new commitments
to educate their youth.
• Many LMICs have taken important steps to transform
their education systems through domestic investment
and reform. But they need additional sources of funding to deliver quality education.
• By 2030, 80 percent of the total global education financing needs will be in LMICs (pre-pandemic estimates).
Most are ineligible for grant or concessional aid, and the
costs of alternative external financing are prohibitive
for long term social investments, creating a significant
funding shortfall.
• The shortfall will be exacerbated by stagnating or falling
economic growth and reduced access to markets due to
the impact of the COVID-19 pandemic.
How much funding is this mechanism
expected to raise?
• IFFEd seeks to mobilize $1 billion in contingent financing (guarantees) and $1 billion in grants for its initial
five-year period of operation.
• Together these will be leveraged into $5 billion in additional financing for education through the MDBs.
• This new funding source could help up to 700 million
children in around 50 LMICs improve their skills and
learning and prepare them for the demands of a changing world.
• Given current global challenges, IFFEd may be established with funding below its initial target but sufficient
to achieve strong results. Resource mobilization efforts
would continue until the funding gap is filled.
Which countries will be eligible to receive
funding?
• The Facility will be accessible to LMICs who are eligible
borrowers from the African Development Bank, Asian
Development Bank, Inter-American Development
Bank, and World Bank.
• For an eligible country to access IFFEd funding, it will
need to show (a) evidence of a credible education sector
plan; (b) ability to sustainably take on additional lending through the MDBs; (c) a commitment to prioritize
education within its national budget; and (d) an agreement to integrate a results-based approach.
How will IFFEd divide resources among the
MDBs?
• At the beginning of the replenishment period, the MDB
Committee will recommend initial grant allocations
and indicative contingent financing allocations for each
participating MDB for the replenishment period, based
on agreed criteria.
• The MDB proposal will be developed in accordance with
the following steps:
STEP 1. Determine list of potential beneficiary countries
The participating MDBs will prepare a recommended list of potential beneficiary countries
at the start of the replenishment period. Such
a determination will serve to draw the broad
boundaries of countries that may receive support.
STEP 2. Calculate notional financing need per country
A composite index will be used to measure each
potential beneficiary country’s notional financing needs. This index will have three components: education access, education quality, and
demographic structure.
STEP 3. Aggregate notional country need calculations
by region
IFFEd will add up the countries’ needs-based
calculations to determine a total notional
regional allocation, based on World Bank
regional groupings.
STEP 4. MDB Committee to review notional regional totals
Following the initial calculation of notional
regional financing totals, the MDB Committee
may review and adjust such totals, if necessary,
based on equity and IFFEd policy considerations.
STEP 5. Allocate shares of notional regional total to
participating MDBs active in each region
Following the calculation of notional regional
totals, grant funds and contingent financing resources will be notionally allocated to
participating MDBs active in each region based
on historic shares of total participating MDB
commitments to LMICs in the region and taking
into account any concentration risks of IFFEd’s
portfolio and required adjustments to mitigate
such risks.
39 A Powerful New Engine for Global Education: The International Finance Facility for Education
STEP 6. Participating MDBs discuss and agree on adjustments to shares of notional regional totals
Participating MDBs active in any region may
discuss and agree on adjustments to shares of
notional regional totals, taking into account
capacity and interest of each participating MDB.
STEP 7. Participating MDB Indicative Grant and
Contingent Financing Allocations
Following any adjustments to Participating
MDB shares of the notional regional totals, the
Participating MDB shares will be summed to
determine a recommended indicative grant allocation and indicative contingent financing allocation for each participating MDB.
Each participating MDB will determine how
to program its indicative allocations over the
replenishment period and will not be bound
by the notional country needs assessments or
notional regional totals used to determine the
participating MDB indicative grant allocation
and indicative contingent financing allocation.
The MDB Committee will annually consider
whether, to ensure that IFFEd funds are being
used effectively and efficiently, any modifications should be considered to the indicative grant
allocations and indicative contingent financing
allocations. If changes are proposed, they will be
submitted to the contributors meeting for review
and the IFFEd Board for approval.
What kind of education projects will be
supported?
• Only public education programs funded by the MDBs
will be eligible for IFFEd financing. These will include
any education-related initiative or reform effort that
is consistent with a country’s strategy to increase
access, learning, and equity. However, early learning,
primary, and secondary education will be prioritized
in financing.
• IFFEd funding could also be provided for activities
related to other sectors (e.g. health, infrastructure)
where such activities are directly related to or integrated with education services. For example, integrated
early childhood development services (education,
health, nutrition, protection) would be eligible but
nutrition alone would not; school infrastructure would
be eligible but rural roads would not.
Will the private sector be eligible to access
IFFEd?
• No. MDBs provide financing directly to governments.
Only public education programs funded by the MDBs
will be eligible for IFFEd financing.
How will you measure success?
• IFFEd has prepared a robust results framework with
donors and the MDBs. The framework will include
major SDG 4 indicators, disaggregated by gender.
• IFFEd will also provide annual reporting on all education programs of the participating MDBs and their
impact on learning.
• IFFEd will report publicly on operations and results
annually.
• In addition, IFFEd will be assessed periodically by an
independent, external evaluator(s). The first independent evaluation will be commissioned before the end of
IFFEd’s first five years of operation.
Is there a risk that IFFEd could contribute to
unsustainable debt burdens?
• IFFEd has been designed to assess and mitigate debt
risks.
• First, the additional debt that IFFEd would support
represents a small fraction of the total debt of the
intended beneficiaries. In 2018, total external debt
of LMICs amounted to almost 2 trillion dollars; the 4
billion of additional lending supported by IFFEd would
represent only 0.2 percent of the stock of debt, or about
0.39 percent of their public and publicly guaranteed
debt.
• Second, IFFEd includes a grant window whose purpose
is to increase the affordability of the MDB funding packages for education to LMICs by merging grants with
loans. This will reduce the cost of funds and support a
positive debt dynamic. Further supporting a positive
dynamic is the requirement that the recipient country
mobilizes funds domestically as part of its education
financing strategy.
• IFFEd will also require that the MDBs conduct a debt
sustainability analysis of eligible countries, which will
be included in IFFEd program documents. Proposals
will need to be consistent with MDB and IMF limits on
concessional borrowing. This requirement will reinforce the MDBs already prudent lending policies as
evidenced by the 4 percentage point decline in the share
of multilateral debt in the total between 2010 and 2018.
Where will the facility be housed and who
40 Frequently Asked Questions
will cover its costs?
IFFEd will be an independent legal entity established in
London. It will have a small secretariat, and IFFEd is expected
to be self-sustaining, financing the cost of its secretariat from
its investments and other sources of income.
Will the Facility be ODA eligible?
Yes, the OECD has recognized IFFEd as an ODA-eligible facility and confirmed that donor paid-in contributions to IFFEd
will be ODA eligible.
Why is IFFEd working through the MDBs
rather than providing funding directly to
countries?
• IFFEd is the result of the landmark Learning Generation
report supported by current and former heads of state,
ministers of finance, and top global business and
education leaders. One of the report’s key recommendations was the creation of a new international finance
facility for education, and the Commission determined
that MDBs are best placed to increase the volume and
effectiveness of investments in education.
• The MDBs have a wealth of experience with education
at a systemic level, which is where interventions are
needed to make lasting change and already have strong
relations with the potential beneficiary countries.
• IFFEd also works within the current education architecture, avoiding duplication and parallel structures.
• Finally, a new Facility that engages directly with countries would be very costly, as significant funds would
be needed to prepare, implement, monitor, and report
on the projects.
How will IFFEd engage with civil society
organizations (CSOs)?
• During the design period of IFFEd, over 50 CSOs participated in a consultation process to contribute their ideas
and feedback, which was used to amend the baseline
principles and inform the technical design document.
• National and global education CSOs can bring value to
IFFEd in areas related to programming, monitoring,
results, and evaluation. CSO engagement will be most
impactful at the country level, and through interactions with the MDBs. IFFEd and the MDBs will continue
to consult with CSOs as to how best to work together on
program design, implementation, and review.
41 A Powerful New Engine for Global Education: The International Finance Facility for Education
For more information:
educationcommission.org/international-finance-facility-education/ |