Giving Compass' Take:

• Devex reports on a new fund to scale innovative education services in Africa and the Middle East: Governments set the goals, donors make the commitments and the Education Outcomes Fund will set the price for each targeted outcome, as carefully-curated service providers bid for the contracts.

• Sounds simple, right? Well, there are definitely going to be challenges in an outcomes-based model such as this, but those interested in how pooled development impact bonds can work should track the progress of EOF.

• Here's a critical reflection on impact bonds in general, along with pros and cons.

A new billion-dollar, outcomes-based education fund for Africa and the Middle East hopes to close the gap in global education by pooling grant funding and using it to scale innovative education services.

Still in its design phase, the Education Outcomes Fund for Africa and the Middle East, or EOF, will use development impact bonds to attract upfront capital and drive country performance and innovation.

Under the guidance of leaders from the Global Steering Group for Impact Investing and the Education Commission, EOF will complement other worldwide initiatives, such as the Global Partnership for Education and the International Finance Facility for Education, by providing funding for learning innovations in a region expected to have 40 percent of the world’s children by 2050.

The way the fund works is this: Governments set learning objectives, donors identify where they align in those areas and make commitments. EOF establishes a price for each targeted outcome and then service providers bid for contracts and are selected based on their suitability, impact, and cost efficiency.

Impact investors fund the interventions and service providers implement the programs, evaluated on their ability to produce results against established metrics.

Independent evaluators will measure the success of the program in helping education systems reach established targets. EOF will then use funds from “outcome payers,” such as international aid donors, philanthropists, and corporations, to pay service providers and impact investors a principal, plus return based on outcomes achieved.

Read the full article about the results-based education fund for Africa and the Middle East by Christin Roby at Devex International Development.