The Committee on Development Effectiveness met to consider the report by the Independent Evaluation Group (IEG) entitled Evaluation of International Finance Corporation Investments in K–12 Private Schools and the draft management comments.

The committee welcomed the evaluation findings and recommendations amid the impact the pandemic has had on education outcomes and funding needs to achieve the fourth Sustainable Development Goal (SDG4) by 2030. IEG noted that the evaluation was undertaken at the request of President Malpass and International Finance Corporation (IFC) management to examine IFC’s direct investments in kindergarten to grade 12 (K–12) private schools and indirect investment through risk-sharing facilities and funds. It clarified that the narrow scope did not seek to address the broader policy debate about the merits of private and public education but rather sought to provide evidence to help the Board of Executive Directors and IFC decide whether and under what circumstances IFC should resume investments in K–12 private schools.

Members acknowledged the positives of IFC being a pioneer and of having signaled to other development finance institutions the business and capacity-building potentials of investing in K–12 private schools, as well as having improved clients’ business and financial management and corporate governance while meeting environmental, health, and safety standards. Members supported IFC’s decision not to resume its investments in K–12 private schools given the evaluation findings that IFC needed to improve measures of equitable access, education quality, financial sustainability, and data collection and monitoring to enhance its focus on development outcomes. They agreed with IFC’s plan that, for the time being, IFC should keep its focus on postsecondary education and limit its interventions on K–12 education to areas outside the scope of IEG’s evaluation such as EdTech, digitalization, ancillary services, public-private partnerships related to school construction, and follow-up to existing private equity funds with investments in K–12 private schools.

Members encouraged IFC to reflect on the lessons learned to inform future projects in terms of the capacity to measure and deliver impact and to continue addressing these deficiencies through the Anticipated Impact Measurement and Monitoring system. They inquired about the status of IFC’s indirect support through equity participation in the 27 private equity funds and venture capital funds with investments in K–12 private schools as well as on IFC’s intentions to support human capital formation in the future. Members noted that education should remain a priority for the World Bank Group, including IFC, and for helping countries achieve the fourth Sustainable Development Goal. They welcomed IFC’s commitment to engaging closely with civil society organizations active in primary and secondary education and to explaining their approach and having a statement on how IFC plans to address the sector in the future.