(MPI) - The Asian Development Bank (ADB) has signed an agreement with the International Finance Facility for Education (IFFEd) in September 26 that will enable at least 500 million USD in new concessional education funding for lower-middle-income countries (LMICs) in Asia and the Pacific.

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Vietnam, among other developing member countries (DMCs) of Bangladesh, India, Mongolia, Pakistan, Papua New Guinea, the Philippines, Sri Lanka, Timor-Leste and Uzbekistan, are currently eligible for IFFEd funding.

Under the financing partnership, IFFEd, a sovereign-backed Swiss foundation established in 2023 to invest in education and skills in LMICs, will guarantee 125 million USD of ADB’s sovereign loan exposure across all sectors, known as a synthetic portfolio, and provide an initial 50 million USD in grants.

By blending IFFEd’s guarantees to ADB with grants that will comprise 10% 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 DMCs.

ADB Vice-President for Sectors and Themes Fatima Yasmin said that 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, she added.

IFFEd Founding Chief Executive Officer Karthik Krishnan emphasized that 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.

By bringing concessional or grant resources to developing countries seeking to strengthen their education systems, the ADB-IFFEd partnership’s key innovation lies in the fact that, at a time of rapid change, it will help ADB’s DMCs prepare for a future characterized by digital transformation, climate change, demographic transitions, and rapid urbanization./.

Bao Linh

Ministry of Planning and Investment