The International Finance Facility for Education (IFFEd)
The International Finance Facility for Education (IFFEd or the Facility) is a major innovation that will tackle the global education crisis and, if fully supported by the international community, be a game-changer for millions of children, giving them the quality education that they deserve.聽
Why do we need IFFEd?
Even before Covid-19 there were 260 million children who were out of school every day.聽The聽pandemic disrupted the education of 1.6 billion children, while聽24 million聽may never return to school.聽聽
In 2019, international aid for education peaked at $16 billion.聽国产视频 has calculated that聽at least聽on average another $59 billion is needed to meet the United Nations国产视频 goal of putting every child on the planet on course for quality education by 2030.聽
It国产视频檚 a huge task, which needs highly innovative solutions.聽This is where IFFEd聽will step in to fill the gap and make a real and sustainable difference.
Many聽countries聽want to improve their education systems but just don国产视频檛 have the money to invest, particularly in today国产视频檚 world. Furthermore, because of international financing rules, when their economies grow,聽they begin to lose out on development aid from donor countries.
How does it work?
IFFEd聽国产视频渟upercharges国产视频 education finance, creating new pools of funding strictly dedicated to supporting a country国产视频檚 education system聽and existing plans.聽聽
International donor countries 国产视频 the likes of the UK, Netherlands, Germany, the U.S, – supply guarantees, which are then used by multinational development banks (MDBs) to raise聽finance聽on the international money markets.聽聽
(The following MDBs so far committed to聽IFFEd: the World Bank, African Development Bank, Asia Development Bank and Inter-American Development Bank.)聽
Because the MDBs have such a strong credit rating, they will be able to raise $4 for every $1 guaranteed by donor countries.聽聽
So, if the Facility had received guarantees from donor countries of $5 billion, the banks could generate $20 billion of new finance for聽developing聽countries聽to聽spend on education.聽The good news is that donors do not need to pay the full guarantee聽up front, but only 15%.聽So only $750 million in cash is needed to back the $20 billion in new funding 国产视频 27 times the initial amount paid in!聽
There is another important part of the mechanism: donor countries also provide聽grants聽to聽IFFEd, which allow the MDBs to provide this new聽funding聽to countries at highly concessional rates 国产视频 very low interest rates over long periods of time.聽聽
So, in this example, to unlock the $20 billion in finance to make it affordable to countries,聽IFFEd聽would receive and pass on those $2 billion in grants to those countries聽to use for聽education.聽
To be eligible, countries will need to have a national education plan, which includes helping the most聽marginalised聽children, and a commitment to increasing education国产视频檚 share of domestic budget. They will聽also need to undergo a debt assessment to make sure聽IFFEd聽finance is right for them.
What will it achieve?
At a time when budgets are tight, and the world is looking for ways to respond creatively to the economic damage caused by the pandemic,聽IFFEd聽will help developing countries unlock large-scale and long-lasting education change to improve the lives and futures of millions of disadvantaged children.聽
国产视频's Education Finance Playbook
A must-have practical guide for governments, donors聽and philanthropists to fund quality, inclusive聽education for all by 2030.
Next resource