Unlocking Opportunity for the World’s Underprivileged Children and Youth: International Finance Facility for Education (IFFEd) Commits to $1.5 Billion for Global Education and Skills in LMICs

• UN Secretary-General António Guterres and UN Special Envoy for Global Education Gordon Brown announce historic public-private, non-partisan international finance facility’s $1.5bn commitment for 2024-2025 to global education at the UN Summit of the Future
• Founding donors Canada, Sweden, and the United Kingdom have contributed $342 million in guarantees and capital plus $100 million in grants, whilst major global philanthropic partners have provided IFFEd seed capital
• Former Cabinet Minister Rt Hon Sir Julian Smith KCB CBE has been appointed IFFEd’s Board Chair and former Britannica Group Global CEO and New York University – Stern School of Business Adjunct Professor Karthik Krishnan is IFFEd’s Founding CEO
• IFFEd has just received a credit rating of Aaa from Moody’s and AA+ from S&P, enabling it to issue its first portfolio guarantees to participating multilateral development banks (MDBs)
• IFFEd will support education and skills development in lower-middle-income countries (LMICs) where nearly half of the world’s children and youth live
• The Asian Development Bank (ADB) is IFFEd’s founding MDB partner; IFFEd’s initial $1.5bn phase will focus on Asia and the Pacific, home to the world’s largest youth population, with first projects aiming to be approved by the IFFEd Board in Q4 of 2024 – before expanding globally to Africa and other regions with new MDB partners

NEW YORK | September 26, 2024 – As world leaders gathered for the UN Summit of the Future, UN Secretary-General António Guterres and UN Special Envoy Gordon Brown announced a new $1.5 billion commitment to education and skills investments for the world’s children and youth most in need – the biggest one-off boost to education funding in decades, powered by the game-changing International Finance Facility for Education (IFFEd).

Amidst today’s escalating conflict, climate, and humanitarian crises, IFFEd will address the dire but often forgotten global education emergency and the enormous education funding gap ($97bn per annum to 2030): today 250 million children don’t go to school, and more than 800 million young people – more than half of the world’s youth – will leave school without any skills for the modern workforce.

UN Special Envoy for Global Education Gordon Brown, who spearheaded IFFEd’s development said: “Today’s $1.5 billion commitment by the International Finance Facility for Education – IFFEd – is the largest one-off investment in global education and skills in decades. I believe this is innovative finance at its best. Aligning guarantees with grants and loans offers a way ahead to maximize resources for international development generally. We call on governments and private partners to join IFFEd’s financing innovation that turns millions into billions to unlock opportunity for the world’s children and youth who need it most.”

IFFEd targets the massive gap in education financing for lower-middle-income countries (LMICs), home to nearly half of the world’s children and youth. From India to Pakistan, Nigeria to Kenya, some of the world’s most populous countries are LMICs caught in the “missing middle”:  they are no longer eligible to receive grants, but find non-concessional financing unaffordable. With limited domestic resources, LMICs’ investments in education and skills are often hit the hardest.

The G20 recognized IFFEd as one of the most significant development finance innovations in the last decade, as it turbocharges the financing power of multilateral development banks (MDBs) by leveraging a mix of grants and sovereign guarantees in a new way to increase funding for human capital development. IFFEd enables LMICs to prioritize investment in education and skills, even in the face of competing needs for climate, health, and infrastructure.

IFFEd’s innovative guarantee instrument will unlock over $1.5bn in education financing by doing more with less: $1 in donor cash through IFFEd will deliver $7 in education and skills financing at country level, creating 7x more impact than traditional grants.

Canada, Sweden, and the United Kingdom have committed $342m in guarantees and paid-in capital, plus $100m in grants, as IFFEd’s founding donors. Global philanthropic foundations providing critical seed funding include the Atlassian Foundation, Jacobs Foundation, Porticus, The Rockefeller Foundation, and the Soros Economic Development Fund (the impact investment arm of Open Society Foundations). FMA provided credit rating advisory and risk management governance services, and Reed Smith (UK) legal services; Lenz & Staehelin are IFFEd’s legal counsel.

IFFEd’s Board Chair Sir Julian Smith said, “Inspired by Gordon Brown’s vision I am delighted that we have now reached the point that we can bring positive change to the life chances of millions of children and young people worldwide. The entire IFFEd team and its partners are driven by an absolute commitment to boosting children’s education by using financial innovation to fill the gap left by declining aid budgets. We look forward to working with our first MDB partner, the Asian Development Bank, to begin our programme of delivery.”

IFFEd’s founding MDB partner is the Asian Development Bank. Ten countries in Asia and the Pacific have been approved by the IFFEd Board as eligible for IFFEd financing: Bangladesh, India, Mongolia, Pakistan, Papua New Guinea, Philippines, Sri Lanka, Timor-Leste, Uzbekistan, and Vietnam. IFFEd is actively engaged in conversations with additional donors and other MDBs including the World Bank and the African Development Bank.

IFFEd’s Founding CEO Karthik Krishnan added, “Setting up future generations for economic success requires investments in human capital development across all stages from early childhood education to upskilling and reskilling. Every $1m invested through IFFEd’s guarantee-grant instrument unlocks $7m of education and skills projects. Every dollar invested in education and skills in LMICs creates $4 (4x) in economic and health benefits each year. Please join us on our crusade to put a billion people in LMICs on a path to prosperity.”

A diverse coalition of partners from the public and private sector have been critical to IFFEd’s evolution and celebrate this billion-dollar milestone with strong statements of support:

UK Minister for Development Anneliese Dodds, MP: “The UK Government is proud to be a founding donor of IFFEd, which will support access to quality education for millions of children across the Global South. This will unlock human potential, build the skills of the global workforce, and contribute to growth in partner countries by allowing lower-middle-income countries to prioritise investment in education and skills.

Our support also has a huge multiplier effect. For every $1 the UK contributes, IFFEd leverages $7 of additional funding, meaning our support has the potential to transform many more lives.”

Canada’s Minister of International Development, Ahmed Hussen, MP: “Canada knows that education is the foundation for a brighter future for every young person. That’s why we are partnering with IFFEd to unlock new funding for quality education and skills building, and the potential to support the hardest to reach children, so no one gets left behind.”

Sweden SIDA Director General, Jakob Granit: “Education is a human right and a prerequisite for economic development and greater prosperity. Sida’s guarantee to IFFEd will increase domestic resource mobilization for education to serve the most marginalized. Improved quality education is a priority for Swedish development cooperation.” 

ADB Vice-President for Sectors and Themes Fatima Yasmin: “Education is the cornerstone of modern, prosperous, and inclusive societies, and we are pleased to announce this partnership with IFFEd. By pooling catalytic and concessional financing, this initiative means our lower-middle-income Developing Member Countries can scale up their investments in education and skills – vital to building knowledge-based economies – along with other sectors at the same time.”

The Rockefeller Foundation President Dr. Rajiv J. Shah: “Investing in education is one of the best ways to brighten our shared future. That’s why The Rockefeller Foundation is proud to support IFFEd, a big bet that will transform the lives of children most in need. By leveraging an innovative financing tool, mobilizing unlikely partners, and measuring its results, IFFEd will help more students access the opportunities they deserve.”

Jacobs Foundation Co-CEO Fabio Segura: “At the Jacobs Foundation, we are excited to support IFFEd’s $1.5 billion initiative to address the dual challenges of inadequate funding and insufficient use of evidence in education. This historic commitment showcases the visionary leadership of donor countries, multilateral development banks, and philanthropic foundations dedicated to transformative change. To drive meaningful progress, we must integrate evidence into both education policy and financing. We call on other governments and foundations to join us in this bold effort to ensure that every child receives the evidence-based education they need to thrive.”

Atlassian Foundation Head Mark Reading: “We’re excited that our investment in the creation of a new financial instrument to solve the daunting education funding challenges has paid off. The International Finance Facility for Education (IFFEd) and its cutting-edge model has been recognized by the G20 as the most innovative contribution to development financing in the last decade. With IFFEd’s power to multiply $1 into $7 for human capital development, investing in this instrument is the fastest way to close the education and skills gap for children and youth who need it most. I urge sovereigns and philanthropies to use the IFFEd instrument to maximize their impact.”

Theirworld Global Youth Ambassador Adrija Sarkar: “I come from India and IFFEd’s investment in a lower-middle-income country like mine would keep more children at school, especially girls who usually drop out due to period poverty and disabled and neurodivergent children who do not receive specialized and tailored care and curriculum. IFFEd will help make quality education services and opportunities more accessible and affordable for our most disadvantaged children and youth.”

About IFFEd

IFFEd was registered as a foundation in Geneva, Switzerland in March 2023 and leadership appointments were made in May 2024.

IFFEd sets historic new precedents for MDB financing innovation on both sides of its balance sheet. Its portfolio credit guarantees to support MDBs have been confirmed to provide credit substitution to MDBs, and will be leveraged 4x by MDBs to support loans for education. Its contingent capital from donors (unlike traditional MDB callable capital) has been accounted for by Moody’s as “useable equity.” Backed by its innovative contingent capital, IFFEd is 5x more efficient than the conventional MDB model in leveraging paid-in capital to support loans.

Watch the IFFEd explainer video to learn how the innovative instrument works.

IFFEd website: https://iff-education.org/

About The Rockefeller Foundation

The Rockefeller Foundation is a pioneering philanthropy built on collaborative partnerships at the frontiers of science, technology, and innovation that enable individuals, families, and communities to flourish. We make big bets to promote the well-being of humanity. Today, we are focused on advancing human opportunity and reversing the climate crisis by transforming systems in food, health, energy, and finance. For more information, sign up for our newsletter at www.rockefellerfoundation.org/subscribe and follow us on X @RockefellerFdn and LI @the-rockefeller-foundation.