Financing Educational Infrastructure

Abstract

The financing and investment mechanisms essential to develop, expand, and maintain physical and non-physical facilities in educational institutions remain a major global challenge, necessitating concerted attention from policymakers and other stakeholders in the education sector. Despite the crucial role education infrastructure plays in creating a conducive learning environment, this sector faces significant financing constraints, particularly given the meagre government budget allocation to education, especially in the areas of capital expenditure, which averages only 9% of total public education expenditures globally, compared to over 80% for recurrent expenditure. This chapter aims to review the various sources of financing for education infrastructure, including public sources such as government budgetary allocation, user fees, and public debt from both commercial credit loans and capital market infrastructure bonds, as well as official development assistance and private sources such as public–private partnerships in education, corporate social responsibility and philanthropic initiatives, and other innovative financing models such as diaspora-remittance bonds, resource-financed infrastructure, and infrastructure asset securitisation. The chapter concludes with policy recommendations for effective education infrastructure financing. © 2025 Elsevier B.V., All rights reserved.