Islamabad, Sep 27: ADB Secures $500 Million for Education Funding in Pakistan
The Asian Development Bank (ADB) has partnered with the International Finance Facility for Education (IFFEd) to provide at least $500 million in concessional education funding for lower-middle-income countries (LMICs) in Asia and the Pacific.
Eligible countries include Bangladesh, India, Mongolia, Pakistan, Papua New Guinea, the Philippines, Sri Lanka, Timor-Leste, Uzbekistan, and Vietnam.
Under this innovative financing partnership, IFFEd, a sovereign-backed Swiss foundation established in 2023, will guarantee $125 million of ADB’s sovereign loan exposure and provide an initial $50 million in grants. This arrangement allows for four times leverage ratio, facilitating increased capital availability while lowering borrowing costs for ADB’s developing member countries.
ADB Vice-President Fatima Yasmin highlighted the importance of education for building inclusive societies and noted that the partnership will enable LMICs to enhance their investments in education and skills.
Currently, over 50% of students in these countries struggle with basic literacy by age 10, and many graduates lack the skills needed for employment.
This initiative aims to address the “missing middle” financing challenge faced by LMICs, where they are ineligible for grants yet cannot afford nonconcessional loans.
By integrating concessional resources into education systems, the ADB–IFFEd partnership seeks to prepare these countries for future challenges such as digital transformation and climate change.
IFFEd’s CEO Karthik Krishnan emphasized the significance of investing in education, stating that LMICs, which are home to nearly half of the world’s children and youth, are essential for long-term economic growth and progress on global goals.
He also noted that IFFEd has been recognized by the G20 as a notable development finance innovation, delivering substantial impact compared to traditional grants.
