Asian Development Bank and IFFEd Partner to Boost Education Funding in Asia and the Pacific
The Asian Development Bank (ADB) has signed an agreement with the International Finance Facility for Education (IFFEd) to provide at least USD 500 million in new concessional education funding for lower middle-income countries (LMICs) in Asia and the Pacific.
Under this partnership, IFFEd, a Swiss foundation established in 2023, will guarantee USD 125 million of ADB’s sovereign loan exposure across all sectors and provide an initial USD 50 million in grants. This arrangement will leverage IFFEd’s guarantees and grants to increase ADB’s lending capacity while reducing borrowing costs for developing member countries (DMCs).
LMICs face an education crisis, with more than 50% of students unable to read simple text by age 10 despite attending school. Graduates also lack the skills needed for employment, leaving many job vacancies unfilled.
ADB Vice-President for Sectors and Themes Fatima Yasmin stated, “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 DMCs can scale up their investments in education and skills–vital to building knowledge-based economies–along with other sectors at the same time.”
IFFEd Founding Chief Executive Officer Karthik Krishnan added, “Investing in education and skills in LMICs–home to nearly half of the world’s children and youth–is key to powering long-term economic growth and making progress on global health, climate, and equity goals.”
Doubts Revealed
Asian Development Bank -: The Asian Development Bank (ADB) is an organization that helps countries in Asia and the Pacific by giving them money and support to improve their economies and lives.
IFFEd -: IFFEd stands for International Finance Facility for Education. It is a group that helps raise money to support education in countries that need it.
concessional education funding -: Concessional education funding means giving money for education at very low-interest rates or with special terms to make it easier for countries to pay back.
lower middle-income countries -: Lower middle-income countries are nations where people generally earn a moderate amount of money, not too high and not too low.
leverage IFFEd’s guarantees and grants -: Leverage IFFEd’s guarantees and grants means using the promises and free money from IFFEd to get more money from other sources.
lending capacity -: Lending capacity is the amount of money an organization like ADB can lend to countries.
borrowing costs -: Borrowing costs are the extra money countries have to pay when they take loans, like interest.
developing member countries -: Developing member countries are nations that are still growing and improving their economies and living conditions.
education crisis -: Education crisis means a big problem in the education system, like many kids not being able to read or write well.
basic literacy -: Basic literacy means being able to read and write simple things.