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Education’s Buy-Down Option

WASHINGTON, DC – Last year was an important one for developing countries, if only because the world was reminded of the true value of education there. Indeed, Malala Yousafzai, the young Pakistani girl who spoke up for children’s right to go to school – even after surviving an assassination attempt by the Taliban – served poignant notice that not educating a child in the developing world is significantly more costly than doing so.

With education squarely in the spotlight, new trends are gaining momentum, many of them merging with “innovative finance” – a concept much beloved by development policymakers and practitioners in difficult economic times. In particular, the emergence of so-called loan buy-downs could encourage financing for education from reluctant donor countries.