Project: Impact-Linked Fund for Education
State of development: Current
Stage of development: Final negotiations
Stage notes: Phased Launch: Q2 - 2022, Q3 - 2022, Q4 - 2022, Q1 - 2023, Q2 - 2023 or later
Type of instrument — Impact Bond: No; Outcomes Fund: No; Social Impact Incentives (SIINC): Yes; Social Impact Guarantee: No; Payment-by-results (no pre-financing): No; Technical Assistance and Market-building program: Yes; Other: Other: Impact-Linked Loans, Impact-Linked Revenue Share Agreements, among other instruments. 
Part of a larger outcomes-based financing program: Yes Dedicated Fund using SIINC and other Impact-Linked Finance instruments
Expected launch date: Q1 - 2022
Total expected project development time: 6-12 months
Expected length of project (years): Open-ended
Project design process began: Q1-2021
Rationale for using outcome-based finance: Correcting market failures (by providing financial incentives for achieving learning outcomes) and enabling high-impact education enterprises to unleash their full impact potential as well as raising investment to scale.
Key challenges to launch: Readiness of enterprises to enter into an Impact-Linked Finance transaction (will be addressed through TA)
Role of the domestic government — Outcomes funder: No; Service provider: No; Member of project committee: No; No formal role: Yes; Other: 
Service providers identified and selected — Request-for-proposals: Yes; Direct contracting by outcome funder/investor/intermediary: No; Provider-led deal development: Yes; Other: 
Feasibility study: Yes
Proposed financing instruments — Debt: Yes; Equity: Yes; Guarantee: Yes; Grant: No; Other: Financial innovations
Technical assistance grant: No — 
Estimated maximum potential outcome payment: 13000000 USD
Overall project finance notes: USD 13M is the expected total fund size at 2nd closing, 1st closing done (CHF 6M)
Social/developmental challenge: According to the UN, over 265 million children globally are currently out of school and 617 million lack minimum proficiency in reading and mathematics. In Sub-Saharan Africa, for example, more than 60% of pupils cannot read or write at the end of primary school. Many innovative education enterprises in developing and emerging economies do not have access to appropriate financing to scale up and create additional impact. Furthermore, these enterprises face a lack of incentives to achieve greater and deeper impact.
Expected intervention model: High-impact education enterprises provide innovative, sustainable and inclusive solutions in their respective region and field of activity
Policy sectors — Employment and private sector development: No; Education: Yes; Social protection: No; Criminal justice: No; Health: No; Agriculture: No; Environment and climate change: No; Water, Sanitation and Hygiene: No; Energy: No; Humanitarian: No; Early Childhood Education: ; Other: 
Secondary SDG goals: 4,5
Target population: Vulnerable, low-income children and youth in (pre-)elementary and secondary school age.
Targeted number of unique service users or beneficiaries: Each case has a specific target population. TBD.
Unit type of targeted beneficiaries: Individual
Country income classification of beneficiaries — Low-income: Yes; Lower-middle-income: Yes; Upper-middle-income: Yes; High-income: No
Notes: Data for this pipeline instrument was last updated in April 2022
Delivery location: South Africa, Egypt, Sierra Leone, Zambia, Irak, Liberia, Lebanon, Jordan