U.S. International Development Finance Corporation


U.S. International Development Finance Corporation is a development finance institution that provides financing for private development projects. It is an independent agency of the U.S. Government. It was created by the bipartisan Better Utilization of Investments Leading to Development Act of 2018, which was signed into law by President Donald Trump on October 5, 2018.
DFC consolidates and modernizes the Overseas Private Investment Corporation and Development Credit Authority of the United States Agency for International Development. In addition to OPIC and DCA's existing capabilities, DFC is equipped with a more than doubled investment cap of $60 billion and new financial tools.
As America’s development bank, DFC helps businesses expand into emerging markets, finances solutions to the most critical challenges facing the developing world, and reinforces U.S. foreign policy and national security interests. The agency is also committed to continuing OPIC’s long track record of generating income for debt reduction.

History

DFC officially began operations on December 20, 2019.

The BUILD Act

DFC was created through the passage of the BUILD Act, which consolidated the Overseas Private Investment Corporation and Development Credit Authority of the United States Agency for International Development. The BUILD Act was introduced to Congress with broad bipartisan support in February 2018 and signed into law by President Trump on October 5, 2018.
The impetus for DFC was the notion that private investment could supplement conventional government-funded aid projects in the developing world. Hence, the Act stipulates that DFC will aim to provide an alternative to “state-directed investments by authoritarian governments," has also been highlighted by analysts as a response to China’s growing overseas investments. Such language is a euphemism for the Belt and Road initiative - in other words, the DFC was intended as a pan-american counterweight to China's Neo-imperialistic projection of soft-power.
Key changes mandated by the BUILD Act include:
The changes are predicated on making DFC more responsive and cost effective.

Products and Services

DFC helps companies manage the risks associated with investment in emerging markets by providing financial tools when they are unavailable or insufficient from commercial sources.

Equity Financing

Direct equity and support for investment funds

Debt Financing

Direct loans and guarantees of up to $1 billion for tenures as long as 25 years, with specific programs targeting small and medium U.S. businesses

Political Risk Insurance

Coverage of up to $1 billion against losses due to currency inconvertibility, government interference, and political violence including terrorism. DFC also offers reinsurance to increase underwriting capacity

Technical Development

Feasibility studies and technical assistance accelerate project identification and preparation to better attract and support private investment in development outcomes

Investments

DFC invests in sectors ranging from critical infrastructure, energy, and technology to healthcare and financing for small businesses and women entrepreneurs. To ensure that all investments adhere to high standards and respect the environment, human rights, and worker rights, the agency monitors all projects from their inception to the conclusion of DFC financial support.
DFC’s investments span Latin America, Sub-Saharan Africa, the Indo-Pacific, and emerging markets around the world with a focus on low- and lower middle-income countries. The agency considers investments in other countries that are important to U.S. foreign policy and national security or address key agency priorities such as women’s economic empowerment.

Initiatives

2X Women's Initiative

Launched by OPIC in March 2018, DFC’s 2X Women's Initiative has catalyzed more than $1 billion of investment in women globally. In addition to pursuing projects that are owned by, led by, or supporting women in the developing world, DFC applies a gender lens to all investments to ensure that women are receiving the net benefits of projects supported by the agency.
DFC also collaborates with the development finance institutions of other G7 countries through the 2X Challenge—a commitment to mobilizing $3 billion for global women’s economic empowerment.

Connect Africa

Through Connect Africa, originally announced by OPIC in July 2018, DFC is committed to investing $1 billion in transportation, information and communications technology, and value chains in Sub-Saharan Africa to improve connectivity and support economic growth.

Advancing a Free and Open Indo-Pacific

In recognition of the great need for quality investment to spur continued economic growth across the Indo-Pacific as well as increasing instances of “debt trap” investments advanced by authoritarian regimes in the region, the Indo-Pacific has become a region of focus for DFC. DFC has prioritized the development of the region’s transportation, energy, and digital infrastructure through transparent, responsible, and private sector-led investments.

Response to Novel Coronavirus (COVID-19)

On 5/14/2020, President Trump signed an Executive Order which delegates authority to the DFC Chief Executive Officer to make loans to private institutions to support the response to COVID-19 or strengthen relevant supply chains.
https://www.whitehouse.gov/presidential-actions/eo-delegating-authority-dpa-ceo-u-s-international-development-finance-corporation-respond-covid-19-outbreak/

Leadership

DFC is led by Adam S. Boehler, the agency’s first Chief Executive Officer. His nomination to lead the agency was announced by the White House on July 10, 2019 and unanimously confirmed by the Senate on September 26, 2019.

Corporate Structure

DFC is governed by a public-private Board of Directors and a Chief Executive Officer who oversees project approval.

See Also