Education: Innovative Financing in Developing Countries

Despite efforts to generate more funds for education, current financing in the education sector is inadequate, inefficient, and inequitable to ensure quality education and improve learning outcomes. One way to fill the financing gap is innovative finance, which means not only sourcing new and additional funds but also spending these funds efficiently and effectively. Blended finance, one type of innovative finance, uses public funds to attract private capital to sustainable development projects by minimizing their risk. The use of blended finance has spread over the past decade in the energy sector for example, but there is scope for it to be applied more widely in the education sector.