How GPE deploys innovative tools to crowd in more financing for education

Over the past decade, various initiatives to develop and implement innovative education financing mechanisms have emerged to address existing financing imbalances. The GPE Multiplier is one of them and has already mobilized an additional $2 billion for 40 countries.

March 14, 2023 by Praveen Prasad, GPE Secretariat
4 minutes read
Ridaki District, School #181. Tajikistan, May 2017. Credit: GPE / Carine Durand
Children in class in School #181, Ridaki District, Tajikistan. May 2017
Credit: GPE / Carine Durand

The inability of a child to read and understand a simple text by the age of 10 is described as learning poverty. Across low- and middle-income countries, the number of children in learning poverty grew by a third—to 70%—between 2019 and 2022, according to the World Bank Group.

Children at the intersection of the effects of COVID-19, climate change and conflict experience the greatest threat to their education, putting their future in jeopardy.

Current global crises put education financing at risk

The solutions are known, but there is a lack of financing at scale to implement them. Even before the pandemic and the current economic crises globally, spending enough on education was low as compared to other sectors.

Domestic budgets, the largest source of financing for education, are being squeezed by rising food and commodity prices, and the increasing severity and cost of climate-related disasters.

Moreover, many countries are unable to increase education spending because they are constrained by worsening debt burdens. An analysis from Save the Children shows that one-third of low- and lower middle-income countries spent more on servicing external debt in 2020 than they did on education.

The importance of non-traditional aid for education

Over the past decade, the call to leverage new financing instruments has been gaining momentum.

Such calls include the Monterrey Consensus, which encouraged “exploring innovative mechanisms to comprehensively address debt problems of developing countries”, and the UN General Assembly resolution 65/146, which recognizes “the potential of innovative mechanisms of financing to contribute to the achievement of the internationally agreed development goals.”

Various initiatives to develop and implement innovative development financing mechanisms have emerged to complement official development assistance (ODA) and address existing financing imbalances.

These initiatives range from international financial and currency transaction taxes and SDG equity-linked bonds to Debt2Ed (a GPE innovative finance tool that transforms a partner country’s debt into new and additional resources for education to enable system transformation), public-private partnerships and market-based financial transactions for development.

GPE’s response: The Multiplier

In these times of declining education financing, GPE has been a leader in crowding-in additional financing to education programs through the GPE Multiplier - an innovative instrument that incentivizes increased investment in education.

Since 2018, GPE has allocated over US$480 million in grants to 40 countries through the Multiplier, unlocking more than $2 billion in additional cofinancing from partners ranging from foundations to multilateral development banks.

GPE innovative finance portfolio works alongside other sources of external funding; it can be invested as a grant or used to lower the interest rate on concessional loans. It can also work alongside other, non-traditional sources of development finance, including private capital.

All GPE partner countries are able to access a Multiplier grant under the 2021–2025 strategic plan.

One of the new initiatives for this period is a lower matching fund requirement for private sector partners and foundations; for these donors, a Multiplier grant can be unlocked by matching each $1 from GPE with a contribution of $1. (For other donors, the ratio remains at $3 in additional resources for every $1 from the Multiplier.)

Findings from an evaluation of the GPE Multiplier

An internal review of the GPE Multiplier found that it played an important role in influencing better donor coordination, encouraged inclusive dialogue between governments, development partners and cofinanciers, and led to strengthened harmonization of funding and a greater focus on critical areas, such as the education of girls and refugees.

On average, the Multiplier helped mobilize 5 times more co-financing (so $1 from the Multiplier leveraged $5 from other sources), above the expected ratio of 1:3.

Examples of successful application of Multiplier grants can be seen in Kenya, Ethiopia, Tajikistan and Papua New Guinea:

  • A critical pillar of the Multiplier is crowding-in not only new and additional financing but to diversify financing partners. An example of this can be seen in Kenya, where together with the World Bank, the Multiplier catalyzed financing from the LEGO Foundation. In 2022, the Multiplier mobilized $210 million in cofinancing from new partners towards quality teaching and learning and pre-primary education.
  • In 2021, a $20 million Multiplier grant to Ethiopia mobilized $55 million in cofinancing from the World Bank and $5 million from Denmark. This funding contributes to the integration of refugees into Ethiopia’s education system.
  • Tajikistan received a $10 million Multiplier grant in 2020, leveraging $30 million in additional funding from the Islamic Development Bank. In addition, the national government allocated $6 million from its budget and UNICEF provided in-kind support of $750,000, taking the overall funding to $46.75 million. The joint funding is building more and better schools, improving math and language teaching for grades 5–9, and strengthening the country’s education management information system.
  • In Papua New Guinea, the government of Japan brought in an additional $10.5 million, enabling the country to access the GPE Multiplier in 2020, in addition to a standard GPE grant. PNG’s example demonstrates how the Multiplier mobilizes more funding, bolsters partnerships and reduces fragmentation—a more effective way to support a country’s priorities. The funding supported improving learning in math and science in the early grades, with a special emphasis on low-performing provinces.

No single grant or innovative financing mechanism will transform education systems. Instead, our hope—so far borne out by the success of and demand for GPE’s innovative financing portfolio—is that the Multiplier will continue to bring new capital, cofinancing partners and innovation, and help concentrate financing behind the needs and priorities of partner countries.


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