Pakistan to Benefit from ADB-IFFEd Education Funding Partnership

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Pakistan stands to gain from a financing partnership between the Asian Development Bank (ADB) and the International Finance Facility for Education (IFFEd), a Swiss-backed sovereign foundation, to secure concessional education funding.

The ADB has signed an agreement with IFFEd to provide at least $500 million in new concessional funding for education in lower middle-income countries across Asia and the Pacific. Pakistan is one of 10 countries eligible for this funding, along with Bangladesh, India, Mongolia, Papua New Guinea, the Philippines, Sri Lanka, Timor-Leste, Uzbekistan, and Vietnam.

IFFEd’s funding can support ADB’s initiatives across various education levels, from early childhood to technical and vocational training, as well as higher education. The partnership will see IFFEd guaranteeing $125 million of ADB’s sovereign loan exposure across sectors and providing an initial $50 million in grants.

By blending IFFEd’s guarantees with grants that cover 10 percent of each loan, the agreement allows ADB to increase its lending capacity and reduce borrowing costs for developing countries.

ADB Vice President Fatima Yasmin emphasized the importance of the partnership, stating that it enables lower middle-income countries to boost their education and skills investments, which are crucial for building knowledge-based economies.

Lower middle-income countries face significant challenges in education, with over half of their students unable to read simple text by age 10, and many graduates lacking job-ready skills. These nations often struggle to finance education as they transition to middle-income status, losing eligibility for grants while being unable to afford non-concessional financing.

The ADB-IFFEd collaboration aims to address this by offering concessional financing and grants to countries looking to strengthen their education systems, preparing them for challenges like digital transformation, climate change, and rapid urbanization.

IFFEd’s donors include Canada, Sweden, and the UK, along with contributions from foundations such as Atlassian, Jacobs, Porticus, Rockefeller, and Soros Economic Development Fund. Initially focusing on Asia, the Pacific, and Africa, IFFEd has been recognized as a significant development finance innovation by the G20, delivering seven times more impact than traditional grants.

Karthik Krishnan, IFFEd’s founding CEO, highlighted the importance of investing in education and skills in lower middle-income countries, which are home to nearly half of the world’s youth, as essential for driving long-term economic growth and progress in global health, climate, and equity goals.