Manila [Philippines], September 28 (ANI/WAM): The Asian Development Bank (ADB) has signed an agreement with the International Finance Facility for Education (IFFEd) that will enable at least USD 500 million in new concessional education funding for lower middle-income countries (LMICs) in Asia and the Pacific.
Under the financing partnership, IFFEd--a sovereign-backed Swiss foundation established in 2023 to invest in education and skills in LMICs--will guarantee USD 125 million of ADB's sovereign loan exposure across all sectors, known as a synthetic portfolio, and provide an initial USD 50 million in grants.
By blending IFFEd's guarantees to ADB with grants that will comprise 10 per cent of every loan, the first-of-its-kind arrangement facilitates a four-time leverage ratio of the guarantee, boosting the amount of capital ADB can lend while lowering borrowing costs for the bank's developing member countries (DMCs).
LMICs face an education crisis. More than 50per cent of students in these countries are not able to read simple text by age 10 despite attending school, and graduates do not have the skills to find jobs, 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 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."
"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," said IFFEd Founding Chief Executive Officer Karthik Krishnan. (ANI/WAM)