Asian Development Bank (ADB) Signs Agreement with IFFEd for USD 500 Million in Concessional Education Funding

The Asian Development Bank (ADB) has recently signed an agreement with the International Finance Facility for Education (IFFEd) that will provide at least USD 500 million in new concessional education funding for lower middle-income countries (LMICs) in Asia and the Pacific. This partnership aims to address the education crisis faced by LMICs, where more than 50% of students are unable to read simple text by age 10 despite attending school.

Under this financing partnership, IFFEd will guarantee USD 125 million of ADB’s sovereign loan exposure and provide an initial USD 50 million in grants. By blending IFFEd’s guarantees with grants, the arrangement will facilitate a four-time leverage ratio of the guarantee, allowing ADB to lend more capital while lowering borrowing costs for DMCs.

Fatima Yasmin, ADB Vice-President for Sectors and Themes, emphasized the importance of education in building prosperous and inclusive societies. She stated, “By pooling catalytic and concessional financing, this initiative means our lower middle-income DMCs can scale up their investments in education and skills–vital to building knowledge-based economies–along with other sectors at the same time.”

Karthik Krishnan, IFFEd Founding Chief Executive Officer, highlighted the significance of investing in education and skills in LMICs, which are home to nearly half of the world’s children and youth. He emphasized that such investments are crucial for long-term economic growth and progress on global health, climate, and equity goals.

This partnership between ADB and IFFEd represents a significant step towards addressing the education crisis in LMICs and empowering these countries to build knowledge-based economies for a sustainable future.