The Asian Development Bank (ADB) and IFFEd have announced their first co-financed education programme to be delivered under their partnership. The programme in Karnataka not only marks ADB’s first large-scale public-school transformation programme in India but is the first ADB project using IFFEd’s innovative guarantee model to tackle financing gap in education
Reflecting on what it takes support a Government to turn their young population into an engine of economic growth, IFFEd’s Director of Education, Thomas Poulsen says that: “The Karnataka programme shows what IFFEd was designed to do: help ambitious governments invest in education at the scale and quality needed to support economic transformation.”
What does it take for a State in India to turn a young population into an engine of economic growth and development?
Karnataka, in India, is a young, fast-growing economy that aims to become a technology and green-growth hub in the region. However, its youth face a significant education and skills gap that, without resolution, will be a barrier to achieving that ambition.
Karnataka is not alone. The Karnataka Government, as with most other Governments, recognise that education is one of the highest-return investments they can make. Yet, many lack the ability to finance the scale of education reform needed to prepare millions of young people for the jobs of tomorrow. Even when financing is available, it is frequently insufficient and often efficiency challenges persist when it comes to implementing and scaling the most effective evidence-based investments.
This is the challenge the International Finance Facility for Education’s (IFFEd) dual multiplier was created to address. The idea was to unlock much larger volumes of concessional finance for education and skills, as a financing multiplier while simultaneously ensuring that the generated financing ensures sustainable results that feed into the development of the economy as an impact multiplier. Sustainable impact doesn’t automatically come from merely additional financing, but from evidence-based education investments that are designed, implemented, and continuously improved, based on the increasing evidence of what works best in different contexts.
Today, the IFFEd model is a reality.
The first programme under the partnership between the Asian Development Bank (ADB) and IFFEd has been announced in India’s Southern state of Karnataka – Strengthening Karnataka Public Schools (SKPS) programme.
The ADB approved a $182.89 million loan, partially underpinned by a $25 million IFFEd guarantee and complemented by a $10 million IFFEd grant to strengthen the state’s public school system and improve learning opportunities for more than one million students, including girls and disadvantaged learners. Inclusion and focus on the most marginalized learners are a key focus for IFFEd and its financing has helped ensure that the SKPS programme was designed with rural youth, those with disabilities and women and girls at the centre of reform efforts.
Karnataka is one of India’s fastest-growing states and home to Bengaluru, a global centre for technology and innovation. The opportunity is enormous. Around 70% of Karnataka’s population is of working age (15–64), providing the state with a powerful demographic dividend. But demographic dividends are not automatic. They depend on whether young people acquire the skills needed to participate in productive employment and contribute to economic growth.
Today, Karnataka faces significant education challenges that threaten to limit that potential. Only 48.3% of young people complete secondary education, while nearly 30% lack the skills required for higher education or employment. Unless these gaps are addressed, the state risks constraining the workforce needed to sustain innovation, attract investment and compete in an increasingly knowledge-based global economy.
The SKPS programme is designed to help change that trajectory. Among other things, the program will establish 500 integrated public-school clusters providing seamless education from pre-primary through secondary school, creating stronger learning pathways for children across the state. The programme will strengthen teacher competencies, modernise curriculum and assessment systems, improve school governance and management, expand science, technology, engineering, arts and mathematics (STEAM) education, and introduce industry-aligned skills modules alongside life-skills programmes that promote inclusion and the protection of women and girls.
Together, these reforms are designed to build the human capital that underpin long-term inclusive economic growth. Better learning outcomes mean more young people completing school with the skills employers need, expanding opportunities for higher education, decent work and entrepreneurship while strengthening Karnataka’s ability to fully realise its demographic dividend.
The case for investing in education has never been stronger. The Karnataka programme shows what IFFEd was designed to do: help ambitious governments invest in education at the scale and quality needed to support economic transformation. It demonstrates how relatively modest donor contributions can catalyse much larger investments, while aligning financing with country-led reform, evidence-based implementation and measurable results. SKPS demonstrates that innovative financing can turn education investment into measurable impact, unlocking larger resources, supporting country-led reform and helping millions of young people develop the skills needed to thrive in tomorrow’s economy.
Read the full announcement about The Strengthening Karnataka’s Public School (SKPS) program here.
15th July 2026
Author:
Thomas Poulsen
