Investing smarter in education with innovative tools – ACG SmartEd

Innovative financing approaches are essential to give all children a quality education by 2030. GPE’s ACG SmartEd is one of them. This blog explains how it helps partner countries bridge funding gaps and address education challenges.

June 21, 2023 by Praveen Prasad, GPE Secretariat
4 minutes read
Teacher Aidana Azatovna, right, leads a lesson at Ak-Bulak kindergarten. Grozd, Kyrgyz Republic. Credit: GPE/Maxime Fossat
Teacher Aidana Azatovna, right, leads a lesson at Ak-Bulak kindergarten. Lessons include a mix of manual, intellectual, and physical activities. Grozd, Kyrgyz Republic.
Credit: GPE/Maxime Fossat

“The world needs innovative ways to attract more funding and match it to the demands of lower-income countries to transform education systems and allow all girls and boys to contribute to the growth and stability of their communities.”

Laura Frigenti, GPE Chief Executive Officer

In the current global context, financing “as usual” is not enough to give all children a quality education by 2030—the remit of Sustainable Development Goal (SDG) 4.

The COVID-19 pandemic has exacerbated challenges and uncertainties that strain official development assistance (ODA) and domestic budgets for education. There has been a decrease of 4% between 2020 and 2021 in total ODA for education (from US$12.6 billion to $12.1 billion).

Using innovative financing in challenging times

The war in Ukraine, deepening rates of poverty, climate change and sluggish economic growth in most parts of the world also challenge the education sector to garner resources to meet both the demand and scale of need.

Given the extent of both the challenges and existing gaps in education financing, substantial scaling-up of existing innovative tools is needed.

A joint initiative to increase education financing: ACG - SmartEd

The Arab Coordination Group (ACG) Smart Education financing initiative (SmartEd) is an innovative approach that brings together the ACG (a grouping of Arab financial development institutions), the Islamic Development Bank and GPE to channel greater levels of funds towards getting more children in school and learning.

Launched at the RewirEd Summit in December 2021, SmartEd has been designed to dramatically scale education financing across IsDB’s 37 eligible member countries (that also represent more than one-third of GPE-eligible partner countries), by mobilizing $4 in cofinancing for every $1 mobilized from GPE.

Together, ACG and GPE funds total half a billion dollars to support education in partner countries. SmartEd will deploy US$500 million in blended funds, integrating US$400 million in IsDB and ACG funding with US$100 million from GPE.

“Through this Initiative, the IsDB, GPE and our Arab development partners are stepping up our commitment to expand available funding for education.”

H.E. Dr. Muhammad Sulaiman Al Jasser, Chairman of the Islamic Development Bank Group

With the funding generated through SmartEd, partner countries can address the learning crisis by financing effective and sustainable education programs. Uzbekistan, Cameroon and the Kyrgyz Republic are the first cohort of partner countries that will access financing through SmartEd.

Uzbekistan has already received its SmartEd allocation of US$160 million—a $40 million grant from GPE and a $120 million financing package from the IsDB and ACG members—and will use the funding to get more girls and boys into school and learning.

The country will work to improve education quality, learning outcomes, equity and access by constructing and equipping more than 80 schools. Additionally, financing through SmartEd will enhance the country’s education management information systems to improve data availability for monitoring and informed decision-making.

Learning outcomes will be improved through curricula reforms, teacher professional development and provision of new teaching and learning materials.

Malika, 3 years old attending a lesson at the Early Learning Hub supported by GPE in Samarkand, Uzbekistan. Credit: GPE/Federico Scoppa
Malika, 3 years old attending a lesson at the Early Learning Hub supported by GPE in Samarkand, Uzbekistan.
GPE/Federico Scoppa

This is just one example of the huge potential that exists to harness the expertise of both development and finance partners towards the common goal to achieve SDG 4.

A required shift in mobilizing financing for education

Over the next decade, a dramatic financial increase is needed from all sources to meet the estimated $20 trillion required to address development challenges in partner countries. In a challenging financial context where traditional forms of development aid are under pressure, innovative finance has emerged as a transformative and complementary approach.

GPE partner countries have embraced GPE’s innovative finance instruments to invest in their education programs, including SmartEd, the GPE Multiplier and Debt2Ed.

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

Innovative finance instruments and strategies allow us to scale capital to bridge funding gaps and address the biggest challenges in education. This in turn will mean that more girls and boys have access to the good education they deserve, paving they way for the future they choose.


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