Recognizing the urgent need to tackle the learning crisis, world leaders expressed strong support for the establishment of the International Finance Facility for Education (IFFEd) at the World Bank spring meeting this year. The IFFEd proposal has the potential to be a truly innovative and efficient education financing mechanism.
During an event co-hosted by the United Kingdom Secretary of State for International Development Rt Hon Penny Mordaunt, the Netherlands Vice Minister and Director General for International Cooperation Reina Buijs and the World Bank Chief Executive Officer Kristalina Georgieva, leaders and representatives from governments including Australia, Bangladesh, Canada, Denmark, Georgia, Indonesia, Japan, Kenya, Nigeria, Norway, Pakistan, Sweden, Switzerland, Ukraine and the USA hailed the Facility as a means to help fully deliver Sustainable Development Goal 4 (SDG 4) of inclusive and equitable quality education and lifelong learning opportunities for all by 2030. Representatives from the European Union, Heads of international organizations such as the United Nations Children Fund (UNICEF), the Global Partnership for Education (GPE), Education Cannot Wait (ECW) as well as the chair of the G20 Eminent Persons Panel also added their voices.
This comes at a time of growing momentum around achieving SDG 4. The launch of the World Bank’s Human Capital Index confirmed that the positive impacts of investments in education will be far reaching as will the costs of inaction. The 2018 World Development Report showed that one additional year of schooling raises a person’s earnings by 8 to 10 percent. The G20 Eminent Persons Group on Global Financial Governance recognized human capital (particularly education) as critical foundations for an attractive investment climate, job creation and economic dynamism. Yet evidence shows critical international financing needs in particular for lower-middle-income countries (LMICs). LMICs are home to more than 700 million children and youth, close to half of the global youth population.
The design of the Facility is near completion. IFFEd would aim to more than double the financing for education provided by MDBs within its initial period.
The Netherlands, the UK and the European Union are leading the way.
- The Government of the Netherlands announced its commitment to the Education Commission to support the final stages of design, approach to the credit rating agencies and transition to operations. According to Mrs. Reina Buijs “We are at a turning point for IFFEd. Following intense work on the design, the founding documents and legal arrangements are in place. Education is a precondition for opportunities in life, for a job, for good health, for fulfillment of an individual as a human being.”
- The European Union pledged financial support for the facility for its initial year of operations. According to Neven Mimica European Commissioner for International Cooperation and Development “I welcome IFFEd’s efforts to unlock more funding for lower-middle-income-countries, who struggle more than others to access affordable financing for education. The EU has initiated the process of investing 6.5 million euros to kick-start IFFEd’s operations and I call on other donors to follow suit to make sure the world’s next generation is not left behind”.
- The UK has been heavily involved in the design phase, and worked to ensure the proposal has a strong focus on learning outcomes and reaching the most marginalized children. The UK highlighted the transformative potential of the facility and called for collective action from the actors present to get behind IFFEd.
It is expected that the commitments displayed at this meeting will lead to concrete financial contributions at the United Nations General Assembly in September. The Facility will become fully operational in 2020.
IFFEd has been recognized in the G20 declaration in Hamburg and supported by the United Nations Secretary-General, the World Bank, three of the major Regional Development Banks and the G20 Group of Eminent Persons.
About the International Facility for Education (IFFED)
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 $2 billion in guarantees, which will then be leveraged to create up to about $8 billion in new financing. By blending this financing with grant funding, the Facility would help mobilize more than $10 billion for education.