Innovative financing for education and skills: Insights from the ETF's Donatella Di Vozzo
The ETF’s Donatella Di Vozzo brings a wealth of specialist financial knowledge to her policy advice role as human capital development specialist at the European Training Foundation (ETF). An economist by training, she previously worked as an education economist at the Belgian Development Agency and the European Commission, notably in Southeast Asia and Sub-Saharan Africa. Since joining the ETF in September 2021, she has been bringing that experience of financing education projects to her new focus on labour market initiatives.
“How sectors are financed is very important,” Donatella explains. “The financing can either be public, or it can be generated in more innovative ways. As part of the ETF’s focus particularly on vocational training, we want to create a space for more innovative financing. It shouldn’t just be about funding projects through the Ministry of Education or the Ministry of Finance.”
Innovative financing has been taking on an increasing role in the European Union’s external action in recent years, supplementing the traditional grant-based model for development cooperation. International partnerships have become increasingly prominent, including those with diverse stakeholders within the ETF’s partner countries in the regions neighbouring the European Union as well as various international organisations including international financial institutions (IFIs).
“New types of financing like loans and guarantees are becoming more common, and that creates a more prominent role for banks and IFIs,” says Donatella. “They’re not going to entirely replace traditional models of cooperation, but they’re definitely gaining in importance.”
Cementing new partnerships
The ETF has long enjoyed close partnerships with IFIs, but in recent years the emphasis has been on expanding these relationships and engaging with them more strategically. Prominent partners now include the European Bank for Reconstruction and Development, the Asian Development Bank, the European Investment Bank, the African Development Bank, the World Bank, and the Association of European Development Finance Institutions. The driver for this renewed commitment?
“The IFIs all play a key role in our partner countries,” says Donatella. “They’re going to be investing in crucial sectors, like the green and digital transitions. It’s very important for us that those investments should be sustainable.”
Focus on skills
Because this is not just about money.
“We need to ensure that the necessary skills are in place to implement the projects the banks are financing,” Donatella explains. “That’s not even the case in Europe right now. Do we have all the skilled engineers and workers we need to achieve the green transition? Probably not. And the problem is amplified in the partner countries.”
The way forward
So, what needs to be done?
“The skills component needs to be included systematically in all projects funded by the banks.”
To make sure that happens, the ETF is acting at three different levels. The first involves reaching out to IFIs to ensure that the ETF – as a specialised EU agency in education and skills development – and the banks are acting in a mutually supportive way to address these concerns. A special event organised with several investment banks in Turin last year was an opportunity to identify progress being made on this front.
The second axis involves leveraging the ETF’s considerable knowledge base to provide specialist advice in designing investment projects. When an IFI is considering investing in a country or region, the ETF can supply detailed intelligence on the specific sectors concerned.
“Knowing what skills are available can really help to orientate bank investments.”
Lastly, the ETF can provide access to a wide range of local stakeholders, to support projects during the implementation phase.
“After many years working in partner countries, the ETF is engaged in many local networks, which are not immediately accessible to the IFIs,” says Donatella. “So, we can help put them in touch with the people they need to support upskilling and reskilling initiatives.”
Making it real
Currently, this new approach can be seen in ongoing discussions with the European Investment Bank, the European Bank for Reconstruction and Development, the African Development Bank and the Asian Development Bank, to explore future collaborations on policy reform and implementation on education and skills development. In addition, as part of the European Year of Skills, the ETF is planning a special publication to heighten the visibility of the work it is doing in this field.
“We need to communicate and raise awareness among IFIs of all the opportunities that exist for them in EU external action programmes focused on jobs and growth,” says Donatella.
Thanks to the initiatives now underway, that awareness is growing by the day.