Keynote 3: Innovative Finance in Education CABRI

Transcript:Keynote 3: Innovative Finance in Education CABRI:
Keynote 3: Innovative Finance in Education CABRI Education Dialogue Serena Guarnaschelli, Dalberg Global Development Advisors 26 February 2013 Share knowledge about current practices in innovative finance Align financing mechanisms with current challenges for education Provide recommendations for next steps Objectives Overview of Innovative Finance Overview of Current Financing Models for Education in Africa Analysis of Innovative Finance Models for Education in Africa Innovative Finance encompasses a wide range of initiatives, such as global taxes, social bonds and blended funds Channels Description Examples Type Mobilize extra funding either through mandatory (tax) or voluntary (philanthropic) contributions Taxes and levies Voluntary contributions and donations Debt swaps Lotteries Airline Solidarity Contribution/Tax applied when passengers purchase tickets PRELIMINARY Over the past ten years innovative fundraising mechanisms raised US$ 60 bn with a focus on environment, health and infrastructure… Agriculture Education Energy and environment Health Infrastructure Investment funds Guarantee funds Partnerships (Information and policy) Partnerships (Information and coordination) Investment funds Bonds Investment funds PRELIMINARY Sample mechanisms Sample initiatives The African Enterprise Challenge Fund AGRA/Standard Bank Transfarm Africa Asian Infrastructure Fund Infrastructure Bonds EBP Investment funds Bonds PPPs Levies Bonds Performance based funds Airline Solidarity Tax IFFIm Global Fund GAVI Alliance Green Bonds Adaptation Fund Global Partnership for Education 1Goal Campaign Affordable Learning Fund Note: The estimation of market sizes, by sector, is complicated by a lack of common definitions and methodologies, and by the highly diverse nature of initiatives across sectors. The World Bank estimates that innovative fundraising generated US$ 57.1 billion in official flows between 2000 and 2008 Observed activity Medium Low High High High Mechanism … and generated valuable lessons for the design and implementation of new mechanisms Explanation Initiative PRELIMINARY Use of standard risk/return profiles from existing issuance programmes, high transparency Green Bonds (US$ 3 bn) Highly rated fixed-income products that support sustainable development Grants and interest-free loans awarded to the private sector through competitive rounds Strong and sustained business engagement based on private-sector principles The African Enterprise Challenge Fund (US$ 150m) Tobin tax Tax on foreign exchange transactions Lack of political commitment, unclear impact on economic activity MassiveGood Branding, communication and operational problems Micro-fundraising scheme IFFIm (US$ 3.6 bn) Bonds to frontload future ODA commitments International coordination, strong execution, scale Overview of Innovative Finance Overview of Current Financing Models for Education in Africa Analysis of Innovative Finance Models for Education in Africa Public funding and public use of funds are the dominant