Prince Charles' British Asian Trust, Michael & Susan Dell Foundation, Tata Trusts and some others have come together to raise initial USD 11 million (about Rs 73 crore) to improve quality of education in India.
The UK government's Department for International Development is also a part of the consortium.
The consortium wants to use the fund as a springboard to double the Development Impact Bond (DIB) in the coming years, a statement said.
Till date, this is the largest DIB globally for education and the largest in India with a potential to be significantly scaled up further, it said.
With this new and innovative social finance tool, the consortium aims to improve literacy and numeracy skills for more than 3,00,000 children, drive focus towards outcomes in the development sector and transform the way education is funded in India, the statement added.
While traditional funding streams are under severe pressure, innovative financing mechanisms such as DIBs are a complementary tool to attract new private capital and will also play a major role in bridging the financing gap to achieve the UN's ambitious Sustainable Development Goals, it added.
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