New ADB-IFFEd Partnership to Unlock $500 Million in Concessional Education Financing in the Asia-Pacific Region

Manila (Philippines), September 28 (ANI/WAM): The Asian Development Bank (ADB) has signed an agreement with the International Financial Facility for Education (IFFEd) that will enable at least USD 500 million in new concessional education financing for lower and secondary schools – income countries (LMICs) in Asia and the Pacific.

Under the financing partnership, IFFEd – a Swiss state-backed foundation established in 2023 to invest in education and skills in LMICs – will guarantee $125 million of ADB exposure to sovereign loans across sectors, called the synthetic portfolio, and provide initial grants in amounting to USD 50 million.

By combining IFFEd guarantees to ADB with grants that will constitute 10 percent of each loan, this first-of-its-kind solution enables a four-fold guarantee leverage ratio, increasing the amount of capital ADB can borrow while lowering borrowing costs for the bank’s developing member countries (DMCs). ).

LMICs are facing an education crisis. More than 50 percent of students in these countries cannot read simple texts by the age of 10 despite attending school, and graduates lack the skills needed to find work, leaving employers unable to fill vacancies.

“Education is the cornerstone of modern, prosperous and inclusive societies, and we are pleased to announce this partnership with IFFEd,” said ADB Vice President for Sectors and Themes Fatima Yasmin. “By combining catalytic and concessional financing, this initiative means our lower middle-income DMCs can increase their investment in education and skills – essential to building a knowledge economy – alongside other sectors simultaneously.” “Investing in education and skills in LMICs – where almost half of the world’s children and young people live – are key to driving long-term economic growth and making progress on global health, climate and equality goals,” said IFFEd Founding CEO Karthik Krishnan. (ANI/WAM)