NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

U.S. International Development Finance Corporation (DFC) today announced it committed $6.7 billion to support private sector development projects in Fiscal Year (FY) 2021 ended September 30, representing the largest level of financial commitments in a single year in 25 years. DFC’s 2021 commitments represent a sixty percent increase from the agency’s past five year average of $4.2 billion. DFC’s priorities reflect a robust response to the COVID-19 pandemic, continued momentum on the 2X Women’s Initiative, a strong focus on increasing investments in lower income countries, and a commitment to help the world mitigate and adapt to the climate crisis.

Thanks to the leadership of DFC’s Board of Directors, talented staff, and bipartisan support in Congress, DFC has shown leadership in mobilizing critical investment in a year when the world faced multiple urgent challenges,” said Dev Jagadesan, DFC’s Acting Chief Executive Officer. “The investments we supported over the last year will build capacity to produce more than 2 billion COVID-19 vaccines for developing countries, while advancing gender equity, responding to the world’s climate crisis, and building the critical infrastructure of the 21st Century.”

“President Biden and Congress have encouraged the DFC to increase its ambition in order to respond to the COVID-19 and climate crises, and to advance the Build Back Better World agenda agreed at the G7 in June,” said David Marchick, DFC’s Chief Operating Officer. “DFC’s extraordinarily talented career professionals stepped up to the challenge, enhancing our development impact and lifting and saving lives in developing countries. The agency’s work produced a banner fiscal year and positioned DFC to deliver more in the future.

With strong bipartisan support in Congress, DFC launched in December 2019, expanding the tools and resources of the Overseas Private Investment Corporation (OPIC). The $6.7 billion DFC committed to development projects in FY 2021 is the largest annual investment of DFC or OPIC since 1996. The agency played central roles in the President’s COVID-19, Climate, and Quad summits as well as in the launch of the President’s Build Back Better World (B3W) initiative.

Highlights of FY 2021 include:

• Five-fold growth in global health investments. In its ongoing work to respond to COVID-19 and help developing countries strengthen healthcare systems, DFC invested nearly $700 million in vaccine manufacturing and other global health investments, representing more than five times the average amount invested annually in health over the past five years. DFC’s global heath investments in 2021 will support the capacity to manufacture almost two billion COVID-19 vaccine does by the end of 2022, including support for equitable distribution around the world.
• Leadership in confronting the global climate crisis. DFC created a new position of Chief Climate Officer and established a new set of bold targets on climate to support those countries and communities that are suffering the most extreme consequences of the changing planet. DFC has committed to achieving net-zero emissions across its portfolio by 2040, and to focusing one-third of all new investments on climate mitigation, adaptation, and resilience by 2023. DFC also made groundbreaking climate-related investments including supporting energy efficient lighting in Brazil, backing sustainable forestry in Colombia and renewable energy in India.
• More than 65 percent of the supported projects in lower and lower-middle income countries. Many DFC projects also focused on underserved communities such as refugee, rural, and indigenous populations.
• Continued momentum on gender smart investments. DFC committed to catalyzing $12 billion to projects that advance the 2X Women’s Initiative and reach at least 15 million women by 2025. These new goals build on the initial success of the 2X Women’s Initiative, which supports projects that are owned by or led by women, or which provide a product or service that delivers a strong benefit to women and has catalyzed $7 billion to date.
• Internal focus on diversity. During fiscal year 2021, DFC worked to expand, strengthen, and diversify its team of senior appointments and increased focus on hiring and promoting women and people of color.
• Strengthening DFC’s institutional capacity to deliver development results. During fiscal year 2021, the agency grew it’s staff by almost 15 percent, invested in improved enterprise risk management solutions, worked to speed the pace of investments and strengthened its capacity to monitor and evaluate the development impact of investments. The agency also enhanced its collaboration with interagency partners and numerous agencies involved in health, including the Department of Health and Human Services and the National Institute of Health.

Photo courtesy of Micheile Henderson.