Project: Catalytical funding to improve African youth employability
State of development: Current
Stage of development: Final negotiations
Stage notes: Scale Up
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: No; Other: 
Rationale for using outcome-based finance: IP2E program is a $12 million facility, with an existing track record in the West African region during these 2 years of operation. The program is based on a grant and Technical Assistance instrument. Diversifying the funding instruments through impact-linked loans introduces an innovative dimension to the program's sustainability. This expansion beyond traditional grant-based funding sources allows for a more resilient financial model for training centers and post-secondary institutions.  

The introduction of impact-linked loans uniquely puts the program to leverage the existing impacts to a larger-scale implementation; with a replicability potential across the West Africa region to significantly contribute to increasing broadly the impact on the education-to-employment landscape and the youth access to decent employment in the region.
Key challenges to launch: The program is seeking to test and develop innovative investment and funding tools that require additional financial resources to effectively expand its outreach. As IP2E actively broadens the program's scope, support from the Accelerator would be a key asset. This funding will provide the necessary financial support to design an outcome-based approach to implement impact-linked loan mechanisms.
 
IP2E's proven track record underscores its commitment to driving positive changes in education. By leveraging the support of the Mastercard Foundation, IP2E aims to attract new investors, thereby amplifying the program's impact and propelling transformative growth within the education sector.
 
With the acquired funding, IP2E will be empowered to design and rigorously test innovative investment tools that help tie financing with the achievement of positive employment outcomes, which will ultimately be optimizing the impact of the fund and contribute to the long-term sustainability within the sector.
Social/developmental challenge: By 2050, demographic shifts and improved graduation rates at lower education tiers will lead to a significant upswing in the count of post-secondary education including TVET (Technical and Vocational Education and Training) students. 450 million young women and men will enter the African job market by 2050. The African demographic dividend represents an unprecedented challenge, calling for a massive mobilization to educate, train and prepare young people, especially girls, for as many skilled and relevant jobs as possible. Nonetheless, these initiatives continue to face challenges. These issues have the potential to impede the efficacy of these programs and their capacity to effectively transition students into the workforce. As such, linking payment to results will help create incentives for TVET centers to design their programs in a way that meets the demands of the market and supports students' entry into employment and sustaining jobs. 
Expected intervention model: Investisseurs & Partenaires (I&P) an impact investment fund, launched an innovative education initiative in 2021. I&P Education to Employment (IP2E) is a $12-million facility aiming at improving African youth employability, through better access to quality and relevant education and training. The program supports post-secondary education institutions through grants and technical assistance in 5 African countries: Burkina-Faso, Ivory Coast, Ghana, Senegal and Togo. 

This concept has been successfully tested over the past 2 years while supporting 30 companies and reaching over 200,000 beneficiaries o/w 57% of women learners, and about 3,500 jobs created/maintained. The program track record has highlighted a high market potential in terms of funding tools. Indeed, the current program's tools and thematic are addressing impact objectives that are not fully tailored to the companies' priority needs. 
To achieve greater social and economic impacts, the program is seeking to expand its range of funding tools (outcome grand funding, Technical assistance) to impact-linked loan and expanding the geographical scope (adding Cameroon, Benin, Togo, and Sahel region); while addressing 3 key pillars: Employability of African Youth through access to quality education, Social Inclusion of vulnerable youth: BoP, women, disabled people, Financial Sustainability of SMEs with tailored funding tools.
Policy sectors — Employment and private sector development: Yes; Education: Yes; Social protection: No; Criminal justice: No; Health: No; Agriculture: No; Environment and climate change: Yes; Water, Sanitation and Hygiene: No; Energy: No; Humanitarian: No; Early Childhood Education: No; Other: 
Primary SDG goal: 4,8,13
Country income classification of beneficiaries — Low-income: Yes; Lower-middle-income: Yes; Upper-middle-income: No; High-income: No
Notes: Data for this pipeline project was last updated in August 2023
Delivery location: Senegal, Côte d'Ivoire, Guinea, Burkina Faso, Cameroon, Mali, Niger, Togo, Benin, Ghana