the International Finance Facility for Education
The Commission is collaborating with countries, multilateral development banks, and partners around the world to mobilize more and better investment in education. The International Finance Facility for Education (IFFEd) is an innovative proposal for education financing that aims to unlock at least US $10 billion of new funding by 2030, making it possible to get every child in school and learning.
What is a finance facility?
The International Finance Facility for Education is a groundbreaking way to finance education in countries around the world. By multiplying donor resources and motivating countries to increase their own investments, the Facility will unleash tremendous new funding streams for education. The Facility has the power to help tens of millions of children go to school and prepare millions more young people for the future of work.
The Facility is a recommendation of the Education Commission, put forward in The Learning Generation report released in September 2016. In the first round of funding, donor countries will provide the Facility with about $1 billion in guarantees, which will then be leveraged to create up to about $4 billion in new financing. By blending this financing with grant funding, the Facility would help mobilize up to $5 billion for education its first five-year programming period.
- 2020 Update: the International Finance Facility for Education (IFFEd)
- September 30, 2019 | Breakthrough in Global Campaign to Double Education Funding for Countries Most in Need
- Getting back on track at the UN's High-Level Political Forum
- Countries near consensus on Facility’s final design
- 5 reasons why the International Finance Facility for Education is a smart answer
Download the 2020 IFFEd Update ›
Read the latest update on the Facility’s development.
Download the Prospectus ›
Learn why this Facility can make a difference.
Download the Design Proposal with Technical Annexes ›
See the details of how the Facility’s business model will work.
Download Statements of Support ›
Diverse leaders from around the world support the Facility.
Closing the gap in education financing
Funding for education is more important than ever. In 2018, bilateral aid to education increased for the first time in several years. Historic commitments of domestic resources and donor funding were made at the Global Partnership for Education Financing Conference, Commonwealth Heads of Government meeting, G7 Summit, and in support of the Education Cannot Wait fund.
Still, traditional aid for education will not be enough to reach Sustainable Development Goal 4 – the world’s shared aim to ensure inclusive and quality education for all and promote lifelong learning.
While investment in education is insufficient across many developing countries, the external financing challenge is particularly dire in lower-middle-income countries (LMICs), which are gradually losing access to low-interest financing or grants while also facing increasingly urgent education needs. While many LMICs have gained economic ground, their tax revenues have not increased quickly enough to finance the expansion and upgrades that their education systems desperately need. LMICs are home to 700 million children and young people, and these countries will not achieve SDG 4 without innovation, reform, and new ways of financing education.
A new way to finance education
The Facility runs on a basic set of principles:
Efficiency: Harness the power of the multilateral development banks (MDBs) – the African, Asian, and Inter-American Development Banks, the European Bank for Reconstruction and Development, and the World Bank – to mobilize additional financing in capital markets and implement programs. The Facility requires no new actors at the country level.
Scale: Multiply traditional aid more than four times, double existing investments from banks, and mobilize US$10 billion of new investments in education in its first few years of operation.
Affordability: Soften loan terms to make them more affordable and manageable for educational investment.
Sustainable financing for results: Align investments with education sector plans, encourage countries to mobilize domestic funds for education and manage their debt responsibility, and deliver results.
Multiplying donor dollars
The Facility offers a game-changing model. It combines innovative multilateral financing with increased domestic investment. This creates new funding and moves countries away from dependence on grants.
Donor guarantees: The Facility will leverage new financing through guarantees from contributing countries provided to MDBs as insurance or protection against potential defaults. This will enable MDBs to increase lending for education.
Leverage: The Facility will make the guarantee base available to the MDBs if they use it to leverage and unlock new and additional financing for education in eligible countries.
Grant component: By offering grant finance in addition to guarantees, the Facility will convert the newly leveraged financing into more affordable and attractive financing packages for educational investment in LMICs. This will make grant aid to these countries four times more effective.
Country commitment: Countries will only be eligible to access this new financing if they have a strong education sector plan – a planned commitment to prioritize education within its national budget, a low risk of debt distress, and an agreement to use results-based approaches.
The Facility’s new stream of funding will support financing needs in many of the more than 50 LMICs and it will allow more grant financing to become available in the poorest countries.
Growing support for a new way to finance the right to education
- In 2015, ten million people signed a global petition demanding action to deliver universal education, which led to the UN’s 2030 timetable for the SDGs including quality primary and secondary education for all.
- More than one million people have signed a petition demanding that the SDGs be transformed into action with the Facility.
- Presidents and prime ministers urged support for the Facility in their Joint Leaders’ Declaration at the 2017 G20 meeting in Hamburg, Germany.
- The UN Secretary-General, the World Bank, and the four regional development banks support the Facility.
- During the 2018 UNGA, leaders from governments including Bangladesh, Canada, Cote d’Ivoire, Denmark, Malawi, Netherlands, Norway, Pakistan, United Arab Emirates, and the United Kingdom voice support for the Facility’s continued development.
- The 2018 G20 Eminent Persons Group on Global Financial Governance emphasizes the gaps in global financial architecture and highlights the Facility as a solution supplementing MDB financing for lower-middle income countries.
Jack Ma Founder and Executive Chairman, Alibaba Group
António Guterres Secretary-General, United Nations
Henrietta Fore Executive Director, UNICEF
Luis Alberto Moreno President, Inter-American Development Bank
Takehiko Nakao President, Asian Development Bank
Amina Mohammed Deputy Secretary-General, United Nations
H.E. Joko Widodo President, Indonesia
Kristalina Georgieva CEO, The World Bank
H.E. Béji Caid Essebsi President, Tunisia
H.E. Peter Mutharika President, Malawi
Akinwumi Adesina President, African Development Bank