Frequently Asked Questions

IFFEd is an innovative financing facility designed to help tackle the annual education funding gap ($91bn) in lower-middle-income countries (LMICs).

IFFEd uses a combination of grants, guarantees and paid in capital to increase the capacity of partner multilateral development banks (MDBs) to provide affordable financing for education and skills in LMICs. It enables the MDBs to provide additional lending for education and skills projects and improves the concessionally of the education financing packages for eligible countries beyond what MDBs can currently offer.

To leverage their capital more effectively; every $1 that goes through IFFEd generates $7 of affordable lending. (See IFFEd technical explainer video).

Traditional aid funding would require the $91bn to be raised to close the annual education funding gap. But by using IFFEd only 10% of that is needed in committed financing to leverage enough to close the gap. IFFEd is the only mechanism capable of creating additional funding for education rather than simply match funding.

Donor funding complements contributions to other existing mechanisms, including the Global Partnership for Education (GPE) and Education Cannot Wait (ECW) and collaboratively to bridge the financing gap in lower-middle-income countries (LMICs).

New donors will also join a coalition of innovative and committed donors, multilateral development banks, philanthropists, and civil society partners who are working together to transform education financing and delivery.

IFFEd delivers financing to national governments through multilateral development banks MDBs. It provides incentives to both the MDBs and lower-middle-income countries (LMICs) to scale up investments in quality education and skills programs by:

• Providing MDBs with additional portfolio credit guarantees – backed by paid-in capital (cash) and contingent capital (guarantees) from donors – to cover the MDBs’ sovereign loan portfolios. This guarantee from IFFEd frees up capital of the MDBs enabling them to increase their lending to LMICs for education and skills development.
• Blending MDB loans with grants to eligible countries to soften the terms of the financing package to make education and skills financing more affordable.
• Requiring countries eligible for IFFEd financing to have a credible education plan, commit adequate domestic resources in support of this plan, and integrate a results-based approach.
• IFFEd is not a policy or implementing agency. It is a financing facility with a lean structure and a small core team, largely made up of finance experts in Geneva. Projects funded by IFFEd are done through multilateral development banks and are ultimately led and implemented by country governments. Watch IFFEd’s technical explainer video here.

IFFEd is the only organisation in global education that creates additional financing, rather than match funding. It is the only organisation that can turn $1 of donor funding into $7 of affordable financing for national governments. IFFEd does this by leveraging the balance sheets of donors and the expertise of multilateral development banks (MDBs). Furthermore, it blends loans with grants to make financing more affordable and attractive for lower-middle-income countries (LMICs) that face a structural gap in education funding.

IFFEd bridges a gap that is otherwise unmet. It offers donors the opportunity to use guarantees to increase affordable funding available for education and skills programmes in lower-middle-income countries.

Lower-middle-income countries house most of the world’s poor and out-of-school children, and have the largest financing gaps, but most are not eligible for grants and concessional financing programs. With limited domestic resources, these countries are caught in the “missing middle,” as non-concessional finance is unaffordable, and education budgets are often hit hardest.

IFFEd addresses this critical gap in the global development finance architecture by enabling lower-middle-income countries to scale up investments in education and skills development.

IFFEd is unique because it is specifically designed to help lower-middle-income countries (LMICs). Other well-known education initiatives and funds largely target low-income countries and countries in crisis.

IFFEd’s purpose is to generate more affordable funding for LMICs that are no longer eligible for other concessional finance as they move through their development journey.

IFFEd is not a delivery or implementing agency. IFFEd and its multilateral development bank (MDB) partners work alongside countries and other international actors such as the Global Partnership for Education (GPE); the Education Cannot Wait Fund (ECW); United Nations agencies such as UNICEF, UNHCR, and UNRWA; national donors; foundations; and civil society.

There are several major education organisations such as the Global Partnership for Education that already provide grant financing for education needs in the poorest countries (low income countries).

However, lower-middle-income countries (LMICs) house most of the world’s poor and out-of-school children and have the largest financing gaps, but most are not eligible for grants and concessional financing programs. With limited domestic resources, these countries are caught in the “missing middle,” as non-concessional finance is unaffordable, and education budgets are often hit hardest. These countries will fall far short of their social and economic potential without major new commitments to educate their children and youth, and equip them with skills for the future.

Many LMICs have taken important steps to transform their education systems through domestic investment and reform. But they need additional sources of funding to deliver quality education and skills.

IFFEd’s coalition of donors is continually growing. Its founding sovereign donors were Canada, Sweden, and the UK. The Republic of Korea was its first Asian sovereign donor.

Foundations to date include: the Atlassian Foundation, Jacobs Foundation, Porticus, Soros Economic Development Fund (the impact investment arm of Open Society Foundations), The Rockefeller Foundation and UBS Optimus Foundation.

Yes, the Organisation for Economic Co-operation and Development (OECD) has recognised IFFEd as an ODA-eligible facility and confirmed that donor paid-in capital contributions to IFFEd, along with grant contributions, are ODA eligible.

IFFEd launched with $250 million in guarantees for multilateral development banks (MDBs) and $100 million in grants that taken together can be leveraged to provide $1 billion in additional financing for education and skills development.

IFFEd aims to unlock billions of dollars in funding by 2030.

Yes, IFFEd approved its first investment cases in 2025.

It has announced two programmes, one in Karnataka, India with the Asian Development Bank and another in Uzbekistan with the World Bank.

IFFEd is the result of a key recommendation in the landmark 2016 Learning Generation report by the Education Commission. The Education Commission recommended that a new International Finance Facility for Education be created and determined that MDBs are best placed to increase the volume and effectiveness of investments in education.

Multilateral development banks (MDBs) have a wealth of experience with education at a systems level, which is where interventions are needed to make lasting change and already have strong relations with the potential beneficiary countries. By partnering with MDBs, IFFEd works within the education architecture, avoiding duplication and parallel structures and the additional costs that would be required to prepare, implement, and monitor a new facility at country level.

IFFEd is accessible to lower-middle-income countries (LMICs) that have access to the non-concessional financing windows of IFFEd’s partner multilateral development banks (MDBs).

For an eligible country to access IFFEd funding, it will need to show:

• Evidence of a credible education sector plan
• Ability to sustainably take on additional lending through the MDBs
• A commitment to prioritise education within its national budget
• Agreement to integrate a results-based approach.

IFFEd makes education projects more attractive to invest in by providing a 10% grant component that reduces the cost and risk of borrowing for LMICs.

IFFEd is a flexible instrument which can support investment across the full education and skills lifecycle, from early childhood development to technical and vocational training, allowing countries to implement projects according to their national strategies.

IFFEd’s grants can be used for technical assistance and capacity building in LMICs to design and implement effective and sustainable education and skills development reforms.

Only public education programmes funded by IFFEd’s partner multilateral development banks (MDBs) are eligible for IFFEd financing. These will include any education-related initiative or reform effort that is consistent with a country’s strategy to increase access, learning, equity, and deliver SDG 4.

IFFEd funding can also be provided for activities related to other sectors (e.g. health, infrastructure) where such activities are directly related to or integrated with education services.

For example:

• Integrated early childhood development services (education, health, nutrition, protection) would be eligible, but nutrition alone would not.
• School infrastructure would be eligible, but rural roads would not.

To be eligible for IFFEd financing, a country must show a commitment to mobilising more domestic financing for education.

It is vital that national governments commit to developing plans and budgets aimed at increasing their education spending to 4% to 6% of gross domestic product (GDP) or 15% to 20% of public spending – as set out in the Incheon Declaration. They can do this by taking on bold revenue reforms to mobilise additional tax income through fair taxation, eliminating and enforcing tax loopholes (including for corporations), and tackling corruption.

However, research shows that many countries – even those already meeting the education spending targets above – will require additional funding if they are to achieve SDG 4 by 2030.

No.

IFFEd helps provide more affordable external financing options for lower-middle-income countries through multilateral development banks (MDBs) so they do not need to take on much more expensive and short-term commercial debt from private capital markets.

IFFEd requires the MDBs to include a country debt sustainability analysis (DSA) and confirmation that the eligible country is managing its debt sustainably in all investment cases. Any proposals must be consistent with MDB and IMF limits on concessional borrowing. This requirement reinforces the MDBs’ already prudent lending policies.

During IFFEd’s original design, over 50 CSOs participated in a consultation process which was used to amend the baseline principles and inform IFFEd’s technical design document.

Now, national and global education CSOs can continue to contribute in areas related to programming, monitoring, results, and evaluation. IFFEd and its multilateral development bank (MDB) partners continue to consult with CSOs at a country level as to how best to work together on program design, implementation, and review.

In due course, CSO representatives will also be invited to join IFFEd’s Board as observers.

IFFEd has a robust results framework with donors and the multilateral development banks (MDBs). The framework includes major SDG 4 indicators, disaggregated by gender.

IFFEd will also provide annual reporting on all education programs of the participating MDBs and their impact on learning outcomes.