Monday
September 12
2022

Press Release: DFC Board of Directors Approves $1.6 Billion of Investment to Advance Energy Supply, Food Security, Climate Solutions, and Other Key Development Challenges

The U.S. International Development Finance Corporation (DFC) Board of Directors this quarter approved 16 new projects totaling $1.6 billion of investment support across equity and investment funds, debt financing, and political risk insurance products.

The approved transactions will focus on the most pressing challenges facing the developing world today, including energy access and security; food security; climate mitigation, adaptation, resilience; and gender equity and financial inclusion. Investments approved this quarter will boost growth and connectivity in priority regions including Eastern Europe and Latin America and across strategic sectors like energy, critical minerals, digital connectivity, and shipping and logistics.

“The DFC transactions approved this quarter will support priority sectors for development and economic growth, including food security, energy security, climate solutions, and small business growth and recovery,” said DFC CEO Scott Nathan. “Russia’s outrageous war in Ukraine continues to send shockwaves through the developing world, limiting access to energy and exacerbating food insecurity. By mobilizing private sector investment, DFC is playing a critically important role in helping communities around the world overcome these compounding crises.”

DFC’s investments support Biden-Harris Administration strategic priorities including the Partnership for Global Infrastructure and Investment and the U.S. Global Food Security Strategy, as well as DFC’s Global Health and Prosperity Initiative2X Women’s InitiativePortfolio for Impact and Innovation (PI2), and Roadmap for Impact. DFC prioritizes investments in low- and lower-middle income countries to make a development impact.

The September meeting of DFC’s Board of Directors included a public hearing and project approvals. Please find more information on DFC’s Board of Directors web page.

DFC’s Board of Directors approved the following projects this quarter:

  • Securing critical minerals for global supply chains: A $30 million equity investment in TechMet Limited builds upon existing DFC support for the development of critical minerals and bolstering of supply chain security for the renewable energy transition.
  • Increasing access to clean drinking water across emerging markets: A $10 million equity investment into the Water Access Acceleration Fund will provide capital to innovative businesses promoting affordable drinking water access mostly in Africa and South and Southeast Asia.
  • Expanding healthcare investments across Asia: A $75 million equity investment in Quadria Capital Fund III, an Asian healthcare-focused private equity fund with a strong ESG impact thesis, will increase investment in high-growth, market-leading healthcare companies across Asia.
  • Supporting social impact lending and microfinance: A $350 million loan guaranty will support the Citibank Global Social Finance Framework, an initiative dedicated to providing up to $500 million of financing to businesses that are expanding access to basic services, creating basic infrastructure and creating jobs as well as financial institutions for on-lending to micro, small, and medium enterprises (MSMEs).
  • Boosting vehicle access in Colombia: A $55 million loan to Finanzauto, S.A. BIC will help an estimated more than 4,000 MSMEs access financing for vehicle purchases, with an emphasis on rural and women-owned enterprises.
  • Expanding support for reliable power access in Sierra Leone: $50 million in political risk insurance for CEC Africa will support existing DFC project CECA Power Generation Limited in providing reliable power access communities in Sierra Leone, a low-income country.
  • Building sustainable affordable housing in Latin America: A $22.5 million equity investment in Ashmore Avenida’s third real estate fund will support the development of energy-efficient, low-income housing targeting underserved communities in Colombia, particularly for women.
  • Bolstering private sector investment in climate action: An equity investment of up to $25 million in GEF LatAm Climate Solutions Fund III will direct critical capital towards climate and sustainability-focused businesses in Brazil.
  • Helping Latin American businesses advance food security: A $50 million DFC equity investment in Aqua Capital Fund III will target business development for enterprises in agriculture and food chains, especially investing in improving agricultural yield and water management.
  • Bridging the investment gap in Latin America: An up to $200 million direct loan for Banco Pichincha DPR will help expand lending to underbanked, women-led or -owned MSMEs in Latin America.
  • Financing critical renewable energy development across Africa: An up to $40 million equity investment in Africa Renewable Energy Fund II will dedicate capital towards mid-sized renewable energy projects across sub-Saharan Africa, increasing access to clean electricity.
  • Supporting energy security in Eastern Europe: $400 million in DFC political risk insurance will bolster energy diversification efforts in Moldova.
  • Bolstering MSME lending in Nepal: A $100 million direct loan to NMB Bank addresses a significant financing gap for Nepalese MSMEs, opening doors to new growth.
  • Advancing renewable energy solutions in Africa and Asia: A $100 million debt investment in the Gigaton Empowerment Fund will finance distributed clean energy transition companies and projects, primarily SMEs in Africa and Asia, to build climate-friendly solutions in response to increasing demand for energy in developing countries.
  • Supporting impact investing across key sectors in India: DFC’s $37.5 million equity investment in Lok Capital promotes sustainable growth for Indian businesses working in financial services, healthcare, agriculture, and climate.
  • Scaling up climate-friendly solutions in South Asia: An up to $50 million equity investment in GEF South Asia Growth Fund III will funnel growth capital towards established MSMEs building valuable climate change and resource efficiency solutions.

Many of these investments are subject to Congressional Notification.

Photo courtesy of Karsten Würth.

Source: U.S. International Development Finance Corporation (link opens in a new window)

Categories
Energy
Tags
climate change, energy access, food security, global development, impact investment