MFAN Applauds House Foreign Affairs Committee Approval of Bipartisan Bill to Reauthorize and Strengthen the U.S. International Development Finance Corporation

July 11, 2024 (WASHINGTON) – MFAN applauds the bipartisan approval today by the House Foreign Affairs Committee of comprehensive legislation to reauthorize and strengthen the U.S. International Development Finance Corporation (DFC) through modifications to the Better Utilization of Investments Leading to Development (BUILD) Act of 2018. Authored by Committee Chairman Michael McCaul (R-TX) and Ranking Member Gregory Meeks (D-NY), H.R. 8926 contains several important provisions that will enhance the impact of the DFC and reinforce its development mandate.

Key provisions in the legislation adopted by the Committee, including in a package of amendments offered by Rep. Joaquin Castro (D-TX), include:

• Modifying the scoring of DFC’s equity authority to more accurately account for future returns on investments by using a net present value basis, which is a standard used in typical financial transactions;
• Creating a new Vice President for Development Policy, which will replace and elevate the role of the Chief Development Officer in the agency and as part of DFC’s senior leadership;
• Strengthening transparency with new reporting requirements of the development impact of DFC projects, including anticipated impact prior to initiation of the project and assessed impact during and after the completion of the project;
• Increasing the agency’s risk appetite in fulfilling its development mandate;
• Clarifying limits on the investments the DFC can make in High Income (HICs) and Upper Middle Income (UMICs) countries; and
• Requiring that DFC activities in UMICs and HICs be structured in such a way as to maximize capital mobilization.

“This legislation will go a long way in enhancing the DFC’s critical work to drive more private investment in poor countries, which is vital for so many U.S. foreign policy and development priorities,” said Tod Preston, MFAN’s Executive Director. “Chairman McCaul, Ranking Member Meeks, and Congressman Castro deserve a lot of credit for their leadership in crafting this bill and advancing it forward.”‍

‍“Everyone knows there’s a tremendous need to mobilize more private capital investment in the developing world, and this bill is a significant step forward to help the DFC do just that,” said MFAN member Rob Mosbacher, Jr., who served as President and CEO of the Overseas Private Investment Corporation (OPIC) from 2005 to 2009. “Increasing DFC’s risk appetite and its use of de-risking mechanisms is critical so it can support more investments in difficult environments, where private capital is most needed.”

MFAN was an early leader in calling for the creation of the DFC and in helping shape the contents of the BUILD Act that was signed into law in 2018 and created the agency. Since the DFC’s establishment, MFAN members have worked to ensure that the agency can live up to the goal of it being the U.S. government’s premier international development finance agency and an integral part of the U.S. foreign policy toolkit.

Early this year, in anticipation of congressional action, MFAN released a comprehensive set of policy recommendations for strengthening the work of the DFC. Several of these recommendations are incorporated into H.R. 8296.

As work on the BUILD Act reauthorization continues, there are ways in which the legislation could be further strengthened -- including requiring greater transparency of disaggregated investment level information on private capital mobilization. MFAN looks forward to working with members of the House and Senate to consider those additions and see the legislation enacted into law this year.