Congressional 

Budget 

Justification

U.S. International

Development

Finance Corporation

Fiscal Year 2020

Table of Contents

EXECUTIVE SUMMARY ______________________________________________________________ 1

OPIC AND DCA: KEY DIFFERENCES UNDER DFC _______________________________________ 2

MODERNIZATION OF TOOLS AND AUTHORITIES ....................................................................................................... 2

INCREASED OVERSIGHT, TRANSPARENCY AND TAXPAYER PROTECTIONS ................................................................ 2

GREATER INTERAGENCY COORDINATION .............................................................................................................. 2

UPDATED FUNDING STRUCTURE .............................................................................................................................. 3

BETTER POLICY ALIGNMENT.................................................................................................................................... 3

FUTURE OF U.S. DEVELOPMENT FINANCE _____________________________________________ 3

FY 2020 DFC BUDGET REQUEST ______________________________________________________ 5

ADMINISTRATIVE EXPENSES ..................................................................................................................................... 6

DFC’S PROGRAMMATIC AUTHORITIES................................................................................................................... 7

CREDIT AND INSURANCE ........................................................................................................................................ 7

EQUITY PROGRAM FUNDING.................................................................................................................................. 8

TECHNICAL ASSISTANCE AND FEASIBILITY STUDIES ................................................................................................... 9

FY 2020 POLICY PRIORITIES ________________________________________________________ 11

OFFICE OF INSPECTOR GENERAL ___________________________________________________ 12

NEW POLICIES, ORGANIZATION, GOVERNANCE AND OVERSIGHT _____________________ 13

APPENDICES______________________________________________________________________ 15

APPENDIX A: ADMINISTRATION PROPOSALS AND LEGISLATIVE BACKGROUND .....................................................15

BUILD Act Timeline ........................................................................................................................... 16

APPENDIX B: APPROPRIATIONS LANGUAGE .........................................................................................................17

INSPECTOR GENERAL....................................................................................................................... 17

CORPORATE CAPITAL ACCOUNT.................................................................................................. 17

PROGRAM ACCOUNT ..................................................................................................................... 18

GENERAL PROVISIONS..................................................................................................................... 18

APPENDIX C: FISCAL YEAR 2018 IN REVIEW........................................................................................................19

OPIC ................................................................................................................................................... 19

DCA .................................................................................................................................................... 22

APPENDIX D: BUDGET BY OBJECT CLASS .............................................................................................................26

1 

Executive Summary

The President’s Fiscal Year 2020 Budget proposes funding and authorities to operationalize the 

BUILD Act and the Administration’s proposal for development finance reform as laid out in the 

June 2018 Government Reorganization plan. The new United States International Development 

Finance Corporation (DFC) will play a central role – in coordination with other agencies – to 

facilitate market-based private sector development and inclusive economic growth in less 

developed countries. The DFC will use credit, capital, and other tools to mobilize private sector 

projects that will support development and U.S. foreign policy. 

The Administration looks forward to working with Congress in a collaborative manner to 

operationalize the DFC on October 1, 2019 (subject to a suitable appropriation). As described in 

the Reorganization Plan submitted to Congress on March 8, on the DFC “Effective Date”, the 

functions, personnel, assets, and liabilities of OPIC, USAID’s Development Credit Authority 

(DCA), and USAID’s legacy credit portfolio will be transferred to the DFC. 

The DFC will build on the strengths of existing development finance programs at OPIC and 

DCA, while introducing reforms and new tools to enhance the effectiveness of U.S. development 

finance efforts and improve taxpayer protections, transparency, and interagency coordination. 

The BUILD Act provides the DFC the authority to issue insurance or reinsurance, make loans 

and guarantees and provide financing to private equity funds, which are currently the core 

programs administered by OPIC and DCA. In addition to these core programs, the BUILD Act 

provides the authorities to invest in equity interests, support feasibility studies, and projectspecific technical assistance. 

The President’s Budget requests $98 million for administrative expenses, $150 million for a new 

equity program, and $50 million for credit subsidy, feasibility studies, and project-specific

technical assistance to support the mission of the DFC in FY 2020. The DFC will collect fees, 

premiums and interest income which will offset an appropriation from the General Fund for 

administrative expenses and programmatic funding. The President’s Budget also requests an 

appropriation of $2 million for an Inspector General.

Program funding will be deployed in coordination with State, USAID, the Millennium Challenge 

Corporation (MCC), and others to support developmental projects in less developed countries, 

and to support Administration priorities such as: 

- Indo-Pacific Strategy, which seeks to promote market-based economic governance, 

sustainable infrastructure investment, and open, fair, and reciprocal trade; 

- Countering Russian Malign Influence by strengthening energy security and economic 

resilience in Eastern Europe and Central Asia through energy diversification; 

- Women’s Global Development and Prosperity Initiative (W-GDP), which supports 

women’s entrepreneurship and access to capital, markets, and technical assistance. For 

example, the DFC will continue OPIC’s 2X initiative and collaborate with USAID’s WGDP fund, which invites interagency transfers. 

- Prosper Africa, a new initiative that will unlock the United States’ competitive advantage 

to accelerate two-way investment and trade with African states; 
2 

As a result of this collaboration, the Budget anticipates that State/USAID posts, missions, and 

regional bureaus will transfer an additional $50 million in funding to the DFC to support 

State/USAID initiatives through the use of project-specific technical assistance, feasibility 

studies, credit subsidy, and equity investments to spur inclusive economic growth, building on 

mission use of DCA today. To foster the collaboration, the Budget proposes that $25 million of 

the DFC’s $200 million in total program funds will be available to match transfers from other 

agencies.

OPIC and DCA: Key Differences under DFC 

The DFC will build on the strengths of existing development finance programs at OPIC and 

DCA, while also introducing reforms and new tools to enhance the effectiveness of U.S. 

development finance efforts and improve taxpayer protections, transparency, and interagency 

coordination. 

Modernization of Tools and Authorities

• Prioritizes low-income and lower-middle-income economies. 

• Provides funding for equity investments. 

• Increases flexibility for direct lending.

• Supports development finance-related feasibility studies and project-specific grants. 

• Authorizes a $60 billion exposure cap compared to OPIC’s $29 billion exposure cap. 

Increased Oversight, Transparency and Taxpayer Protections

• An Office of Inspector General devoted to DFC oversight. 

• An independent accountability mechanism. 

• Risk-sharing with the private sector through co-financing and structuring of tools such 

that private sector partners have sufficient “skin in the game” alongside the U.S. 

Government. 

• Additionality to private sector resources; i.e. mobilizing investment that would not 

otherwise have occurred.

• Enhanced risk management through concentration risk limitations and diversification of 

the overall exposure of the DFC’s portfolio. 

• Greater transparency and Congressional oversight.

• More modern and transparent monitoring and evaluation framework. 

Greater Interagency Coordination

• New Board Structure with the State Department and USAID as the Chair and Vice-Chair, 

respectively, to strengthen policy alignment as well as representation by other agencies 

on the Board (i.e. Treasury and Commerce) and private sector members. 

• Creation of the Chief Development Officer (CDO) and other interagency links that will 

leverage the resources, expertise, and networks of USAID, the State Department, the 

MCC, and other related agencies to ensure that DFC programming and investment 

decisions are consistent with development, diplomatic, and national security priorities. 
3 

• Close coordination between the DFC, embassies, and USAID missions in developing and 

transitioning countries will help to identify opportunities for impactful investments. 

• Interagency detail opportunities between the DFC, the State Department, USAID, MCC, 

and other agencies to foster knowledge of development finance tools and to encourage 

and facilitate greater interagency cross collaboration.

• Transfer Authority and a Matching Fund to incentivize program and project coordination 

mission budget transfers between the DFC and State/USAID.

Updated Funding Structure

• All administrative expenses, project-specific transaction costs, and program costs (for 

equity, credit subsidy, etc.) are subject to appropriations. 

• Mandatory balances in the Corporate Capital Account will pay insurance claims, invest in 

Treasury securities, and fund dividends to Treasury. 

• All fees and interest collected and earned by the DFC will be scored as discretionary, and 

will be used to offset the cost of the DFC’s administrative expenses and programming; 

any excess collections will effectively offset other discretionary expenses, e.g. the cost of 

other international affairs (function 150) agencies. 

• The DFC will be subject to the Federal Credit Reform Act of 1990 for all of its credit 

programs. 

Better Policy Alignment

With its new Board structure and in coordination with State and USAID and other relevant 

agencies, the DFC will develop projects through a number of mechanisms: 

• A policy driven approach to ensure the DFC is being deployed to advance U.S. foreign 

policy and national security priorities. 

• A demand driven, private sector initiated, approach to respond to the needs of U.S. 

business interests. 

• A State embassy and USAID mission-led deal-development approach, like that currently 

used by DCA, that will allow USAID missions and U.S. embassies access to more 

financial tools increasing development impact. 

Future of U.S. Development Finance 

On October 5, 2018, the President signed into law the Better Utilization of Investments Leading 

to Development Act of 2018 – (the BUILD Act). The BUILD Act consolidates, modernizes and 

reforms the U.S. Government’s development finance capabilities – primarily the Overseas 

Private Investment Corporation (OPIC) and the Development Credit Authority (DCA) of the 

U.S. Agency for International Development (USAID) – into a new agency: The United States 

International Development Finance Corporation (DFC). The BUILD Act launched a new era in 

U.S. development finance with broad bipartisan congressional support. The bipartisan support 

for the BUILD Act arose from a recognition that this model of mobilizing private investment 

must become a more prominent tool of U.S. foreign policy, as the needs in the developing world 

are too great to meet with government resources alone. 
4 

The DFC is a wholly owned Government corporation, whose mission is to facilitate marketbased private sector development and inclusive economic growth in less developed countries. 

The DFC will offer innovative development finance to businesses operating in developing 

countries and provide a robust alternative to state-directed lending by authoritarian governments. 

Private capital can spur global development funding as investors seek investment opportunities 

in developing countries. However, pools of private sector capital remain largely untapped due to 

a variety of factors, including high regulatory risk, fragmented supply chains, and monopolies in 

critical sectors, like power and transportation. 

The U.S. government is addressing the challenge to more effectively mobilize private sector 

capital. For example, USAID recently unveiled its Private Sector Engagement policy to address 

– amongst other objectives – some of the policy challenges countries often face attracting private 

capital. The DFC, for its part, will offer development finance tools to help investors de-risk 

investments in developing countries. Backing from the U.S. government, through development 

finance tools such as loans, guarantees, political risk insurance, feasibility studies, and equity can 

catalyze significant amounts of private capital into emerging markets. This backing is essential to 

supporting key sectors such as infrastructure, power, water and health; improving the quality of 

life for millions, laying the groundwork for creating modern economies, and/or providing 

financing for women or other sectors that have not had sufficient – or any – access to 

commercial financing. 

Private capital mobilization in support of sustainable, broad-based economic growth, poverty 

reduction and development through demand driven partnerships with the private sector advances 

U.S. foreign policy interests. Leveraging private-sector resources to promote economic growth in 

developing countries helps extend American influence and reinforce American values, such as 

the rule of law, transparency and fair business practices. Emerging market trading partners that 

adhere to free-market principles and promote transparent, rules-based governance today, will 

provide a market for American goods and services tomorrow. 

At a time when developing countries are incurring dangerous levels of debt from state-directed 

lending, the DFC private sector-led model seeks to build stable and prosperous societies, 

strengthen local markets, reduce dependence on foreign aid and develop critical infrastructure 

that is built to last. The DFC will adhere to high standards of international financial institutions 

related to governance, and provide transparency, debt sustainability, as well as environmental 

and social safeguards.

The United States must compete, however, for these positive outcomes. Other countries are 

seeking to project their economic and geopolitical influence. China, for instance, has promised 

the resources to initiate long-term efforts to invest over $1 trillion in Eurasia, Africa, and Latin 

America. Rather than meeting competitors at the lowest common denominator, or engaging in 

practices that distort markets, the United States will use its development finance tools to pursue 

development and national-security objectives, while projecting American values and norms and 

promoting responsible business practices in partner countries. These relationships will, over the 

long term, strengthen the geopolitical position of the United States, and provide the economic 

foundation for future international partnerships. 
5 

FY 2020 DFC Budget Request 

($ in thousands) FY 2018 

Actual

FY 2019 

Enacted

FY 2020 

Request

Overseas Private Investment 

Corporation

-270,800 -354,800

Administrative Expenses 79,200 79,200 -

Credit Subsidy 20,000 20,000 -

Offsetting Collections -370,000 -454,000 -

USAID – Development Credit Authority 9,932 10,000 -

Administrative Expenses 9,932 10,000 -

Credit Subsidy Transfer Limitation1 [50,000] [55,000] -

U.S. Development Finance Institution - - -125,000

Subtotal, Admin/Program/IG - - 300,000

 Administrative Expenses - - 98,000

 Inspector General - - 2,000

 Program - - 200,000

Of which, Credit Subsidy/ Technical 

Assistance / Feasibility Studies

- - 50,000

Of which Equity - - 150,000

Of which, funds to match incoming 

transfers from State/USAID2

[25,000]

Offsetting Collections - - -425,000

Other1 - - [50,000]

Complementary Programming 

and/or Transfers from State/USAID 

Economic Support and 

Development Funds1

- - [50,000]

1

Bracketed amounts are funded from other sources -e.g. transfers from other USAID/State 

accounts (e.g. ESDF, GHP) to DCA in FY18/19 and to the DFC in the 2020 Budget. 

2

The $25 Matching Fund is a subset of the DFC’s $200 million request for program funds. 

The President’s Budget requests $98 million for administrative expenses and project-specific

transaction costs to provide resources to the DFC. This request includes all positions currently 

funded through the OPIC and the DCA administrative expense appropriations. Consolidation of 

these two entities will promote efficiency by streamlining credit and investment functions, such 

as risk management, legal, and loan servicing activities.

Further, the DFC, State and USAID will continue to enhance cooperation and training 

opportunities related to development finance, to allow State Department embassies and USAID 
6 

missions to seamlessly use the DFC and its new tools, and to give the DFC a global platform to 

generate and support development finance related activities. 

In addition, the Budget requests $200 million in program funds, of which $50 million will 

support credit subsidy, technical assistance, and special projects and programs, and $150 million 

to fund equity investments. Of the $200 million appropriated to the DFC for program-related 

funding, $25 million will be used as a “Matching Fund” to incentivize program and project 

coordination between the DFC and State/USAID to be directed by the Chief Development 

Officer. The Budget also anticipates $50 million in complementary programming and transfers 

of Economic Support and Development Funds from USAID Bureaus and Missions to maintain 

and expand on the Mission-led, deal-development model currently used by DCA to support 

Administration priorities. The President’s Budget also requests $2 million to be appropriated 

from the General Fund for the Office of Inspector General to conduct oversight. 

The budgetary structure of the DFC as described in the BUILD Act is different from the current 

structures of OPIC and DCA, and requires special appropriations language to implement. The 

Budget requests that discretionary costs such as administrative expenses, project-specific

transaction costs, direct loan and loan guarantee subsidy, equity investments, and other noninsurance programming be funded with an upfront appropriation from the General Fund. This 

appropriation will be reimbursed by expected collections of fees for services, interest earnings, 

negative subsidy receipts, and returns on investments, as they are collected over the course of the 

fiscal year to more than fully offset the FY 2020 appropriation from the General Fund and offset

other function 150 costs. 

Administrative Expenses 

The President’s Budget requests $98 million in FY 2020 for Administrative Expenses and 

project-specific transaction costs. The FY 2020 funding request is expected to fund all existing 

OPIC and DCA positions, other operational expenses of the DFC (including what was formerly 

OPIC’s working capital costs), and new responsibilities to implement the DFC’s new equity, 

grant and technical assistance programs. This assumes a level of 305 FTEs and takes into 

consideration additional FTE positions such as the Chief Development Officer and Chief Risk 

Officer, increased evaluation and monitoring activity, and responding to new reporting 

requirements mandated by the BUILD Act. 

The Administrative Expense and project-specific transaction cost request is also expected to 

support continued transition costs associated with merging OPIC and DCA into the DFC. The 

budget request includes transition costs such as the merging of IT systems (i.e. licenses, 

databases, maintenance, upgrades, and enhancements) between OPIC and DCA; a new 

communication strategy to inform the public of the creation of the DFC and its services; 

renovations to house employees at the DFC’s headquarters; and other transitions costs as needed. 

The period of availability for all but $1 million of these funds is 3 years (i.e. administrative funds 

and project-specific transaction costs will expire in FY 2022). The $1 million that is carved out 

will have a 5-year period of availability (expiring Sept 30, 2024) to allow the DFC to build up a 
7 

reserve of administrative and/or project-specific transaction cost expenses to address sometimes 

“lumpy”, unforeseen litigation and claims settlement procedures.

The BUILD Act narrowed the definition1

 of what OPIC used to refer to as “working capital 

costs” –now known as project-specific transaction costs -and made these costs subject to 

appropriation. This is consistent with how these costs are funded at other federal agencies and 

provides more transparency and Congressional oversight. The budget request anticipates that the 

DFC will continue to charge borrowers’ fees for these costs, and spend them subject to the $98 

million appropriated cap for both project-specific transaction costs and administrative expenses.

The budget request plans for the DFC to administer the U.S. Government’s Sovereign Loan 

Guarantee program, just as was handled by DCA staff in previous years. Given the transfer of 

DCA staff to the DFC, the Corporation will take on administration of this function. As noted in 

the Reorganization Plan submitted to Congress on March 8, the Administration has not yet come 

to a final determination as to which agency will be assigned the “legal rights and 

responsibilities” for the SLG portfolio. 

The Budget request envisions that the DFC will coordinate with the State Department, USAID 

and other agencies to develop processes and mechanisms that leverage the USG’s existing 

international presence and platforms, e.g. through a robust detail/rotations program that fosters 

development finance expertise in posts and missions.

DFC’s Programmatic Authorities

Credit and Insurance 

This Budget requests an appropriation of $50 million for credit subsidy, feasibility studies, and 

project-specific technical assistance and anticipates that the Chief Development Officer will 

facilitate the transfer of an additional $50 million (partly incentivized by the DFC’s Matching 

Fund) from State/USAID to the DFC for State/USAID to leverage DFC development finance 

tools to support Administration priorities. Insurance premiums and claims are mandatory 

activities, per the BUILD Act. 

The DFC will optimize the credit and insurance programs currently used by OPIC and DCA. 

These foundational programs will have room for growth, up to $60 billion, to expand the reach 

of U.S. government financial investments. The increased portfolio authorization and addition of 

more modern investment tools will equip the DFC to mobilize substantially more capital to 

advance development and grow economies to promote inclusive economic growth in the world’s 

least developed countries. The FY 2020 Budget will continue OPIC’s authority to support direct 

loans in local currencies – enabling the DFC to mobilize local resources. Senior debt financing 

 

1 BUILD Act Section 1434(k) “DEFINITION.—In this section, the term ‘‘project-specific transaction costs’’— (1) 

means those costs incurred by the Corporation for travel, legal expenses, and direct and indirect costs incurred in 

claims settlements associated with the provision of support under title II and shall not be considered administrative 

expenses for the purposes of this section; and (2) does not include information technology (as such term is defined in 

section 11101 of title 40, United States Code).”
8 

will also remain available for emerging market private equity funds through an open and 

competitive process.

As a counterbalance to ensure taxpayer protection, the appropriations language limits the annual 

lending risk to $8 billion per year, and the BUILD Act requires investors to bear at least 20 

percent of the project risk. The appropriations language also limits appropriated and transferred 

funds to be used for credit subsidies to no more than $80 million.2

 

The DFC will offer direct loans and guarantees estimated in FY 2020 at $4.8 billion, as well as

an estimated $750 million of political risk insurance. This represents a 67% increase in 

commitments over FY 2018 actual. 

Equity Program Funding 

The U.S. needs appropriate tools to achieve its policy and development priorities — tools that 

catalyze additional investment both by our international counterparts and the private sector. 

While debt financing and political risk insurance remain important programs, one of the central 

components of the BUILD Act is the new equity authority that allows the DFC to play a greater 

catalytic role in mobilizing private sector capital into investments to help meet United States’

foreign policy and development goals. The BUILD Act includes safeguards, for example, 

limiting the DFC’s exposure to any one project to 30% and a total limit of 35% of the DFC’s 

overall exposure. The President’s Budget requests $150 million for the DFC to make equity 

investments in funds. 

As the DFC begins to make equity investments, it has the advantage of OPIC’s established track 

record of lending to investment funds. However, this financial structure is outside the norm for 

investment funds, which most often operate under the principle of equal terms for each 

participant, which has been a disincentive for equity investors to partner with OPIC. 

With the passage of the BUILD Act, and subject to appropriations, the DFC will have the 

opportunity to leverage its resources to invest equity in investment funds -- catalyzing significant 

additional private sector capital to achieve important development objectives. Each fund is 

expected to return the invested capital and produce a reasonable return to the Treasury. 

The ability to invest equity complements DFC’s current debt financing and political risk 

insurance products, by allowing the DFC to support investments where OPIC and DCA’s 

traditional tools may not be the most appropriate to achieve the developmental policy objectives. 

Furthermore, having the ability to invest in private equity funds will allow the U.S. to better 

align its tools and capital with our allies such as Germany, Japan, and the United Kingdom, to 

smartly deploy capital to advance U.S. priorities. Over many decades, all bilateral and 

 

2 In FY2019, Congress provided $20 million for OPIC credit subsidy, and DCA was authorized to use up 

to $55 million transferred from foreign assistance accounts managed by USAID to support loan 

guarantees.
9 

multilateral development finance institutions have demonstrated the power of equity as a proven 

capital mobilization tool and now the DFC will be able to deploy this method as well.

The BUILD Act requires that equity authority be used with projects that have a clearly defined 

development and foreign policy purpose and take into account objectives such as: 

• Reducing identified market failures,

• Reducing significant project delays, 

• Contributing to the transformation of local conditions to promote market development, 

• Aligning with commercial partner incentives,

• Identifying significant development impact and long-term commercial sustainability, and 

supporting the policies of the United States Government. 

In the first year, the equity program is expected to support private equity funds that will drive 

development impact, while capturing returns in the out-years on a cash basis if the investments 

are financially successful (as opposed to a grant that assumes no returns, or a loan that estimates 

the cost per the Federal Credit Reform Act of 1990). This budgetary treatment is consistent with 

other U.S. government investments in non-federal securities.

With the $150 million in requested appropriations, the DFC will be able to construct a welldiversified portfolio of 5 to 10 investment funds with an average equity investment between $5 

million to $20 million. Adding $150 million for equity funds in FY 2020 would represent a 36% 

expansion on OPIC’s average (non-equity debt) funds program business over the past 6 years, a 

significant and impactful, but manageable expansion.

The DFC will select experienced and successful fund managers to promote broad U.S. foreign 

policy and strategic goals, such as the 2X initiative to support women, focusing on less 

developed countries in the Indo Pacific, Africa, the Middle East, Latin America, and on key 

strategic sectors that are important to U.S. interests, such as infrastructure. Further, with equity 

authority, the DFC will be able to invest on the same basis along with the development financial 

institutions of our closest allies (e.g. the United Kingdom’s CDC, Germany’s DEG, France’s

Proparco) and private sector partners (U.S. pension funds and financial institutions). 

Technical Assistance and Feasibility Studies

This Budget requests an appropriation of $50 million for credit subsidy, feasibility studies, and 

project-specific technical assistance and anticipates that the Chief Development Officer will 

facilitate the transfer of an additional $50 million (partly incentivized by the DFC’s Matching 

Fund) from State/USAID to the DFC for State/USAID to leverage DFC development finance 

tools to support Administration priorities. 

In low- and lower-middle-income countries where the DFC will operate, the BUILD Act gives 

the agency the ability to initiate and support feasibility studies and project-specific technical 

assistance. Technical assistance designed to complement DFC programming will cover a wide 

range of activities tailored to the specific needs of individual transactions, including feasibility 

studies, market studies, development of lending strategies and products, financial literacy and 

business development services for borrowers, and the training of loan officers. Early support for 
10 

planning and project development enables more well-planned projects to get off the ground and 

may be necessary to realize critical infrastructure projects. By lifting specific projects to the 

level where the DFC’s investment tools can scale the project, this technical assistance will help 

enhance developmental impact. Regular interactions between the DFC and interagency through 

the CDO and other mechanisms will ensure that this programing will not duplicate programming

done by USAID, MCC and other agencies. 
11 

FY 2020 Policy Priorities

Critical to the DFC’s success are strong linkages to U.S. policymakers to ensure the DFC both 

complements and is guided by U.S. foreign policy, development and national security objectives. 

Indeed, under a new Board structure, the Secretary of State will serve as Chair and the 

Administrator of USAID will service as Vice-Chair of the DFC. In the past, OPIC has primarily 

operated on a “demand driven,” private sector initiated approach to respond to the needs of U.S. 

businesses. While that “demand driven” model will continue, the Administration will also make 

greater use of the DFC to advance U.S. foreign policy objectives in the developing world. This

includes the USAID mission-led deal-development approach currently used by DCA that will 

allow USAID missions – now with more financial tools - to support priority areas and increase

development impact. Through its network of Embassies around the world, the State Department 

will ensure that DFC tools and resources are deployed in the context of a policy-driven approach 

to advance specific U.S. foreign policy and development priorities. 

The Department of State and USAID requested $50 million in Economic Support and 

Development Funds (ESDF) in the President’s FY 2020 Budget for complementary 

programming and transfers, to maintain the mission-led deal-development model currently used 

by DCA and to support Administration foreign policy priorities. Whether the DFC is deployed in 

Africa, the Indo-Pacific or the Western Hemisphere, the DFC, with its investment tools and high 

standards, must be available to offer an alternative to the state-directed approaches by strategic 

competitors which can leave developing countries worse off. 

Below are some of the ways in which the DFC is expected to advance Administration priorities 

in FY20: 

• Indo-Pacific Strategy – The Administration’s Indo-Pacific strategy envisions a peaceful 

and secure region of sovereign nations, supports a framework for economic growth that is 

private sector-led, and encourages a governance model that promotes growth through 

open, transparent, and rules-based economies. The DFC will be closely aligned with the 

broader interagency – including through State Department initiatives such as the Digital 

Connectivity and Cybersecurity Partnership (DCCP), Asia EDGE and the Infrastructure 

Transaction and Assistance Network (ITAN) – to support investment for digital 

connectivity, energy and sustainable, high-quality infrastructure.

No government has enough money to address the Indo-Pacific’s economic and 

development needs, such as the region’s annual $1.7 trillion need for infrastructure 

financing.3

 This challenge requires strategic partnerships, which is why OPIC has signed 

a trilateral MOU with Japan and Australia and agreements with others in the region to 

combine resources, technical expertise and private sector funding. While signed under 

OPIC, it is expected that these initiatives will begin showing results in FY20 after OPIC 

has transitioned to the DFC. 

 

3 Asian Development Bank, Meeting Asia’s Infrastructure Needs, Asian Development Bank, 2017, xi.

https://www.adb.org/sites/default/files/publication/227496/special-reportinfrastructure.pdfhttps://www.adb.org/sites/default/files/publication/227496/special-report-infrastructure.pdf 
12 

• Women’s Global Development and Prosperity Initiative (W-GDP) – OPIC’s 2X 

initiative helped set the standard for what it means to invest in women. Doing so not only 

addresses an incredible gap in access to financing, but advances U.S. interests to create 

more stable and prosperous societies. The BUILD Act’s priority on women’s economic 

empowerment means the DFC will continue OPIC’s 2X initiative and play a critical role 

in the W-GDP’s support for women’s entrepreneurship and access to capital, markets, 

and technical assistance. 

The W-GDP initiative will help ensure collaboration between the DFC and USAID’s 

WGDP fund, which invites interagency transfers. This close collaboration will 

undoubtedly lead to instances where DFC support can help scale an enterprise originally 

backed by USAID grant funding. For example, on a recent trip to Ethiopia, OPIC’s 

Acting President and CEO signed a letter of interest with a women-owned business 

which originally began to grow with the help of USAID funding. Additionally, USAID 

is backing the issuance of a $100 million women’s livelihood bond in Asia through a 

DCA guarantee to support the W-GDP initiative.

• Power Africa and Prosper Africa – Like OPIC and DCA with Power Africa, the DFC 

will be a key contributing agency to both Power Africa and the new Prosper Africa

Presidential Initiative, which seeks to advance the United States’ competitive advantage 

by accelerating two-way investment and trade with Africa. State-directed investments 

have left many African states with unsustainable debt or projects, making the DFC’s 

model of private sector-led development all the more important. A focus on 

infrastructure, information and communications technology, value chains, and logistics 

can help advance African countries on their journey to self-reliance. 

• U.S.-India Development Foundation – The DFC will work closely with USAID as 

USAID establishes the proposed U.S.-India Development Foundation (US-IDF). The 

US-IDF will be a locally registered Indian organization strongly affiliated with USAID to 

address four of India's most pressing development challenges: tuberculosis, water, 

sanitation and hygiene; and, pollution and its health impacts. The US-IDF will support 

India in mobilizing its domestic resources, particularly impact investing and corporate 

social responsibility funds, to deploy a wide range of development programming and 

financing to resolve these development challenges in the country. In order to maximize 

the development impact of this unique structure, while minimizing duplication across 

agencies, the US-IDF will be able to leverage the DFC’s tools to provide development 

finance and equity investments. 

Office of Inspector General 

The President’s Budget requests $2 million to establish and maintain an Office of Inspector 

General for the new DFC. Consistent with principles of independence, this amount should be 

appropriated from the General Fund of the Treasury and not offset by collections of the agency. 
13 

The $2 million figure for the initial set up of the DFC’s IG is primarily based on the amounts that 

would be necessary to start up the Inspector General office, which would cover 4 FTEs 

(Inspector General, Auditor, Counsel/Investigator, and a support person) with the balance of the 

funding going to contracting for mandatory audits and inspections. Upon hiring of the Inspector 

General, that Inspector General office, in accordance with the Inspector General Act, will 

produce its own budget request.

The BUILD Act establishes several oversight structures to govern the agency overall. The DFC 

will have its own Inspector General (IG) (§1414) to conduct reviews, investigations, and 

inspections of its operations and activities. The Office of Inspector General will improve the 

economy, effectiveness and efficiency of the DFC, while also working to detect waste, fraud, 

abuse, and mismanagement. 

In the past, OPIC has come under the jurisdiction of the USAID Inspector General pursuant to a 

reimbursable Memorandum of Understanding (MOU). Section 1414 of the Act establishes an 

Inspector General (IG) specifically for the DFC. Similarly, DCA’s activities have been overseen 

by the USAID IG. As the statute calls for a Designated Federal Entity Inspector General for the 

DFC, appointment and removal authority for the Inspector General resides with the Board. It is 

anticipated that the process of identifying candidates for the DFC’s first Inspector General will 

take place during calendar year 2019. The new Inspector General would then fill vacant positions 

in its office out of its own line-item budget and coordinate the transition of any items on which 

the USAID Inspector General is still working. 

Until a new IG is in place, USAID’s Inspector General will continue to provide investigative 

services and audit services for statutorily required audits (such as of credit card transactions and 

the requirements of the Federal Information Security Management Act), and it will complete any 

outstanding program audits. The DFC will reimburse the USAID Inspector General for these 

services until a new IG is in place. 

New Policies, Organization, Governance and Oversight

In addition to doubling OPIC’s exposure cap and adding new authorities, the BUILD Act 

requires significant policy changes and reorganizes OPIC’s management structure, which will 

influence the allocation of DFC Administrative Expenses. Administrative expense spending will 

incorporate all statutory requirements codified in the BUILD Act. 

Less-Developed Countries: The legislation requires that the DFC implement policies to 

prioritize DFC support in less-developed countries with low-income or a lower-middle-income 

economies, and to limit support in upper middle-income economies. The budgetary implications 

of the above requirements are reflected in the Budget request through increased subsidy costs 

and decreased negative subsidy receipts generated, depending on a variety of factors. Such 

increases in cost could be significant depending on the particular transaction. Due to the diverse 

nature of the DFC’s loans, subsidy is calculated on a loan-by-loan basis, using a model approved 
14 

by the Office of Management and Budget (OMB). The model integrates a number of factors: 

including the risk of the project, amount of fees paid, the term and timing of the exposure.

Monitoring and Evaluation: The BUILD Act calls for a more modernized and transparent 

monitoring and evaluation framework, replacing OPIC and DCA’s current methods, to set targets 

for appropriate development performance of the DFC’s portfolio, including the replacement of 

the development impact measurement system currently used by OPIC and DCA. The new 

performance measurement system will ensure that support provided by the DFC is in addition to 

private investment. The system will include standards and methods for measuring the projected 

and ex post development impact of a project, and information necessary to comply with annual 

reporting requirements, which, among other things, will cover the economic and social 

development impact, respect for worker rights, environmental impact and women’s economic 

empowerment. 

The DFC will prioritize funding to support the cost of evaluating an estimated 200 projects per 

year as well as funding to support one-time software development. In addition to the direct 

monitoring and evaluation conducted by the DFC on its own transactions, additional monitoring 

and evaluation will be provided by USAID on transactions that originate within their field 

missions. USAID and the DFC will work closely together to align these monitoring and 

evaluation systems and ensure they are mutually supportive. 

The Budget request includes funds for additional contract support to evaluate and monitor 

DCA’s former projects. Contractors provide evaluations and monitoring for economic and social 

analysis when staff cannot go to certain regions for safety reasons. Rather than expending limited

FTE staff resources, complicated, time-consuming projects are often better served by one-time or 

project-specific contractors with better access and more sector-specific expertise.

For more information on the proposed organization structure of the DFC, see the recently 

released DFC Reorganization Plan.

4

 

4 https://www.opic.gov/sites/default/files/files/shelby-letter-reorg-plan-compressed.pdf
15 

Appendices

Appendix A: Administration Proposals and Legislative Background 

In March 2017, the President’s Budget proposal to wind-down OPIC helped catalyze fresh 

thinking about how the U.S. Government provides development finance. The President’s 

Executive Order on a Comprehensive Plan for Reorganizing the Executive Branch built on this 

momentum and presented a unique opportunity to further examine the U.S. Government’s 

development-finance tools across multiple departments and agencies.

In November 2017, before the Asia-Pacific Economic Cooperation (APEC) Summit in Vietnam, 

the President committed to reforming U.S. development-finance institutions "so they better 

incentivize private-sector investment" and "provide strong alternatives to state-directed 

initiatives that come with many strings attached." The President’s National Security Strategy 

prioritized efforts to catalyze private sector activity and the mobilization of resources to 

developing countries. 

Over the course of several months, the Office of Management and Budget and the National 

Security Council convened a robust interagency dialogue that included input from the 

Department of State, USAID, and OPIC as well as the Departments of Treasury, Commerce, and 

others. The interagency working group observed that outdated legal authorities and fragmented 

interagency coordination hamper the U.S. Government’s current ability to deploy development 

finance. The group developed a proposal for streamlining and consolidating U.S. developmentfinance functions to improve efficiencies, reform programming, and help advance U.S. foreignpolicy goals while achieving greater development impacts through commercially viable deals. 

The President’s Fiscal Year 2019 Budget (and subsequently, the Administration’s governmentwide reorganization package) proposed to consolidate multiple U.S. development finance 

functions, such as the Overseas Private Investment Corporation (OPIC) and USAID’s 

Development Credit Authority (DCA), into a new, standalone, Development Finance Institution 

(DFI) with strong linkages to the State Department and USAID.

The BUILD Act of 2018 was simultaneously introduced in the Senate and House at the end of 

February 2018 with broad bipartisan support. 
16 

BUILD Act Timeline: 

• On February 27, 2018, 

o H.R.5105 was introduced by Congressman Ted Yoho (R-FL) and co-sponsored 

by Congressman Adam Smith (D-WA). (link) 

o S.2463 was introduced by Senator Bob Corker (R-TN) and co-sponsored by 

Senator Chris Coons (D-DE). (link) 

• On April 11, 2018, OPIC’s President and CEO, Ray W. Washburne, testified before the 

House Foreign Affairs Committee on the proposal in President Trump’s Fiscal Year 2019 

Budget to create a modernized development finance institution. (transcript and remarks

link) 

• On May 9, 2018, the House Foreign Affairs Committee conducted its markup of HR 

5105 (link) 

• On May 10, 2018, OPIC’s President and CEO, Ray W. Washburne, testified before the 

Senate Foreign Relations Committee on the President’s Fiscal Year 2019 Budget 

proposal to create a modernized development finance institution. (link) 

• On June 27, 2018, the Congressional Budget Office scored S.2463 and estimated that on 

net, implementing the legislation would reduce federal costs by $22 million over the 

2019-2023 period, assuming appropriation actions consistent with the bill. CBO also 

estimated that enacting S. 2463 would decrease direct spending by $20 million over the 

2019-2028 period, and that S. 2463 would not increase net direct spending or on-budget 

deficits in any of the four consecutive 10-year periods beginning in 2029. (link) 

• On July 17, 2018, the House of Representatives passed H.R.5105 by voice vote on a 

motion to suspend the rules with 44 co-sponsors, comprised of 24 Republicans and 20 

Democrats, representing 22 separate States. (link) 

• On September 26, 2018, the House of Representatives agreed to a Senate amendment to 

H.R.302, pursuant to H.Res. 1082, which included the BUILD Act of 2018. 

• By October 3, 2018, S.2463 had 17 co-sponsors, comprised of eight Democrats, eight 

Republicans and one Independent, representing 15 separate States. (link) 

• On October 3, 2018, an amended BUILD Act of 2018 was passed by the Senate as part of 

H.R.302, the FAA Reauthorization Act of 2018 by a Yea-Nay vote of 93 to 6. 

• On October 5, 2018 The President signed the BUILD Act into law (P.L. 115-254),

launching a new era in U.S. development finance with broad bi-partisan congressional 

support. (Enrolled Bill link)
17 

Appendix B: Appropriations Language 

INSPECTOR GENERAL

For necessary expenses of the Office of Inspector General in carrying out the provisions of the 

Inspector General Act of 1978, as amended, $2,000,000 to remain available until September 30, 

2021. 

CORPORATE CAPITAL ACCOUNT

The United States International Development Finance Corporation is authorized to make such 

expenditures and commitments within the limits of funds and borrowing authority available to 

the Corporation, and in accord with the law, and to make such expenditures and commitments 

without regard to fiscal year limitations, as provided by section 9104 of title 31, United States 

Code, as may be necessary in carrying out the programs for the current fiscal year for such 

Corporation: Provided, That for necessary expenses of the activities described in subsections (b), 

(c), (e), (f), and (g) of section 1421 of division F of Public Law 115–254 and for administrative 

expenses to carry out authorized activities and project-specific transaction costs described in 

section 1434(d) of such division of such Act, $298,000,000: Provided further, of the amounts 

provided— 

(1) $98,000,000 shall remain available until September 30, 2022 for administrative 

expenses to carry out authorized activities (including an amount for official reception and 

representation expenses which shall not exceed $35,000) and project-specific transaction 

costs as described in section 1434(d) of such division of such Act, of which $1,000,000 

shall remain available until September 30, 2024; 

(2) $150,000,000 shall remain available until September 30, 2022 for the activities 

described in section 1421(c) of such division of such Act; and 

(3) $50,000,000 shall be paid to the "Development Finance Corporation—Program 

Account": 

Provided further, That, in this fiscal year and hereafter, the Corporation shall collect the amounts 

described in section 1434(h) of division F of Public Law 115–254: Provided further, That in 

fiscal year 2020 such collections shall be credited as offsetting collections to this appropriation: 

Provided further, such collections collected in fiscal year 2020 in excess of $298,000,000 shall 

be credited to this account and shall be available in future fiscal years only to the extent provided 

in advance in appropriations Acts: Provided further, That, in fiscal year 2020, if such collections 

are less than $298,000,000, receipts collected pursuant to division F of Public Law 115–254 and 

the Federal Credit Reform Act of 1990, in an amount equal to such shortfall , shall be credited as 

offsetting collections to this appropriation: Provided further, That the sums herein appropriated 

from the General Fund shall be reduced on a dollar-for-dollar basis by the offsetting collections 

described under this heading so as to result in a final fiscal year appropriation from the General 

Fund estimated at $0. 
18 

PROGRAM ACCOUNT

Amounts paid from the "Development Finance Corporation—Corporate Capital Account" 

(CCA) shall remain available until September 30, 2022: Provided, That not to exceed 

$80,000,000 of amounts paid to this account from CCA or transferred to this account pursuant to 

section 1434(j) of division F of Public Law 115–254 shall be available for the cost of direct and 

guaranteed loans provided by the Development Finance Corporation pursuant to section 1421 (b) 

of such division of such Act: Provided further, That such costs, including the cost of modifying 

such loans, shall be as defined in section 502 of the Congressional Budget Act of 1974: Provided 

further, That such amounts are to remain available through 2028 for the liquidation of valid 

obligations incurred in fiscal year 2020: Provided further, That the total loan principal or 

guaranteed principal amount shall not to exceed $8,000,000,000. 

GENERAL PROVISIONS

Availability of Funds 

Sec. 7009. No part of any appropriation contained in this Act shall remain available for 

obligation after the expiration of the current fiscal year unless expressly so provided in this Act: 

Provided, That funds appropriated for the purposes of chapters 1 and 8 of part I, sections 661 and 

667, chapters 4, 5, 6, 8, and 9 of part II of the Foreign Assistance Act of 1961, section 23 of the 

Arms Export Control Act, and funds made available for the United States International 

Development Finance Corporation shall remain available for an additional 4 years from the date 

on which the availability of such funds would otherwise have expired, if such funds are initially 

obligated before the expiration of their respective periods of availability contained in this Act: 

Provided further, That notwithstanding any other provision of this Act, any funds made available 

for the purposes of chapter 1 of part I and chapter 4 of part II of the Foreign Assistance Act of 

1961 which are allocated or obligated for cash disbursements in order to address balance of 

payments or economic policy reform objectives, shall remain available for an additional 4 years 

from the date on which the availability of such funds would otherwise have expired, if such 

funds are initially allocated or obligated before the expiration of their respective periods of 

availability contained in this Act. [DFC emphasis added]. 

Availability of Funds for the Development Finance Corporation 

SEC. 7074. (a) Funds transferred to the United States International Development Finance 

Corporation (Corporation) pursuant to section 1434(j) of the BUILD Act of 2018 (division F of 

Public Law 115–254) shall only be initially made available consistent with purposes of the 

account into which they were initially appropriated, and may be deemed to meet minimum 

funding requirements upon deobligation and reobligation for a use other than such original 

purpose. 

(b) Funds transferred from Development Credit Authority program account of the United States 

Agency for International Development to the Corporation's Corporate Capital Account pursuant 

to section 1434(i) of division F of Public Law 115–254 shall be transferred and merged with 

such account, and may thereafter be deemed to meet any minimum funding requirements 

attributed for at the time of deposit into the Development Credit Authority program account. 
19 

Appendix C: Fiscal Year 2018 in Review 

OPIC

The passage of the BUILD -- or Better Utilization of Investments Leading to Development -- Act 

capped a year of many milestones for OPIC. During fiscal year 2018, OPIC: 

• Launched the 2X Women’s Initiative and surpassed our initial targets to mobilize 

investment in support of the world’s women.

• Committed to invest $1 billion in Africa over the next three years through the new 

Connect Africa Initiative focused on strengthening critical infrastructure, technology and 

value chains.

• Formed partnerships with our allies, including an MOU with Japan Bank for International 

Cooperation and a trilateral partnership with Japan and Australia to support more 

development in the Indo-Pacific. 

• Launched a new venture capital program to support emerging entrepreneurs in the 

developing world.

• Continued our long track record of operating as a self-sustaining U.S. Government 

Agency that contributes to deficit reduction.

2X: Invest in Women. Invest in the World.

The world’s fastest growing emerging market is not a country or a region. It is the world’s 

women.

OPIC launched the 2X Women’s Initiative on International Women’s Day in March of 2018, 

committing to mobilize $1 billion to invest in the world’s women. By year end, OPIC had 

surpassed that initial target.

The 2X Challenge: The U.S., the U.K., Canada, France, Italy, Japan and Germany later 

established the 2X Challenge, committing to mobilize $3 billion to economically 

empower women across the developing world. 

Gender lens investing: In addition to mobilizing investment to projects that directly 

benefit women, OPIC is applying a gender lens to all the projects it considers, to help 

ensure women will benefit.

Fund Mujer: OPIC committed to support emerging market private equity funds that 

support women in Latin America and the Caribbean through Fund Mujer, a new 

partnership with Inter-American Development Bank’s IDB Invest Arm. Fund Mujer is 

the first gender-focused fund for Latin America and the Caribbean.
20 

Why Invest in Women?

• To close the credit gap: Women worldwide face a more than $300 billion shortfall in access to 

credit.

• To capture a multi trillion-dollar opportunity: Research shows that closing the gender labor gap 

could add trillions to global GDP by 2025.

• To achieve a powerful multiplier effect: The 2X initiative was named for the multiplier effect 

achieved by investing in women. When women earn a competitive income, they spend the vast 

majority on food, healthcare and education, benefiting their families and their communities

How OPIC is Investing in Women

Helping women access water in India: An OPIC loan is helping WaterHealth India 

install hundreds of water purification plants selling clean water at a fraction of the cost of 

bottled water. The project will improve the health and quality of life for millions of 

Indians, particularly women who typically have the primary responsibility for obtaining 

water for the family.

 

Supporting female food vendors in Kenya: An OPIC loan is helping Twiga Foods Ltd. 

supply fresh produce from Kenyan farmers and deliver it to urban vendors, the majority 

of whom are women, helping them to increase their sales and profits.

 

Empowering women-owned and women-led businesses: OPIC financing and political 

risk insurance is helping SunFunder, a solar energy finance business co-founded by 

Audrey Desiderato, provide loans to help emerging market off-grid solar businesses meet 

their working capital, construction, inventory finance and structured finance needs. 

 

Connecting Africa to the World

 

Africa is a longstanding OPIC priority and accounts for more than one-quarter of OPIC’s global 

portfolio. The continent presents both a great need for investment in development and a 

significant opportunity for investors. In 2018 OPIC worked to extend its investment on the 

continent, making official visits to 24 countries to explore new projects. 

 

OPIC’s new Connect Africa Initiative will invest $1 billion over three years to projects in sectors 

that will foster economic growth and better connectivity with global economies. Connect Africa 

will focus investment in telecommunications and internet access; value chains that connect 

producers of raw materials with end users; and essential infrastructure, such as roads, railways, 

ports and airports. 

OPIC at work in Sub Saharan Africa

Bolstering a key industry in Botswana: OPIC financing has helped create hundreds of 

new jobs in Botswana’s domestic diamond industry by investing in a diamond cutting 

and polishing facility that has kept value-added functions such as sorting, marketing and 

manufacturing in the country.
21 

Expanding food production in Malawi: Through its partnership with Global 

Communities, OPIC is working to expand food production in Malawi by providing loans 

and technical support to small agribusinesses. 

Supporting small business lending and transportation in Uganda: In a country where 

motorcycle taxis are both a critical source of transportation and a major employer, an 

OPIC loan is helping Tugende Ltd. expand its lease-to-own financing to motorcycle taxi 

drivers, expanding a key source of transportation in Uganda and empowering local 

entrepreneurs.

Adding electricity across the continent: OPIC is a key partner in the U.S. Power Africa

initiative to harness the resources of the private sector to bring more electricity to Sub 

Saharan Africa. To date, OPIC has supported construction of 20 utility-scale power plants 

and off-grid renewable power projects in Ghana, Guinea, Kenya, Nigeria, Senegal, South 

Africa, Tanzania, Togo and Zambia. 

Promoting a free and open Indo-Pacific

 

When investors look to the future of the global economy, more and more of them are looking 

toward the Indo-Pacific. This vast region stretching from India to Southeast Asia is home to 

(share) of the world’s population and multiple rapidly emerging economies that will play a 

central role in global peace, security and prosperity. 

 

OPIC in 2018 committed to a heightened focus to help transform the region into a global 

economic leader in trade, innovation and technology. 

 

Partnering with regional allies: OPIC entered new partnerships with U.S. allies, 

including a Memorandum of Understanding with the Japan Bank for International 

Cooperation and a trilateral partnership with Japan and Australia, to support more 

infrastructure development in the Indo-Pacific.

Expanded presence in the region: OPIC in 2018 added a fulltime director in Tokyo to 

supplement the existing OPIC office in Bangkok and expand local outreach and business 

development. 

OPIC at work in the Indo-Pacific

 

Investing in businesses that serve poor communities in Southeast Asia: Through its 

support of the Unitus Livelihood Impact Fund, OPIC is supporting multiple small 

businesses that are creating jobs and expanding access to financial services in South East 

Asia. 

Increasing microfinance lending to women in India: OPIC financing is helping 

IndusInd Bank Ltd. is provide microfinance loans to female entrepreneurs, empowering 

many of the women to start or grow businesses. 
22 

Extending a longstanding commitment to Latin America

OPIC understands that Latin America is not only a close neighbor but a key partner in promoting 

regional security and stability. Latin America accounts for almost a quarter of OPIC’s global 

portfolio and is the focus of multiple OPIC initiatives to support development, empower women 

and to promote investment as a stabilizing force in the region. 

2X Americas: Through its new 2X Women’s Initiative, OPIC has committed to mobilize 

$500 million to projects that will support women in Latin America. Assistant to the 

President Ivanka Trump announced the initiative with OPIC President and CEO Ray W. 

Washburne in April at the Summit of the Americas in Lima, Peru.

Expanding 4G connectivity in Ecuador and Peru: OPIC financing is supporting a 

major telecommunications project that will deploy at least 500 telecom towers and 

expand access to 4G mobile broadband, making high-speed internet more widely 

available and reliable, and adding coverage in rural areas.

Increasing small business lending in Paraguay: OPIC financing is helping a local bank 

increase lending to small and medium enterprises to support economic growth. 

DCA 

The Development Credit Authority program uses U.S. Treasury-backed credit guarantees, to 

attract private commercial banks and other investors into markets with limited formal 

commercial finance. This approach supports ongoing USAID programs around the world and 

makes available a powerful transactional tool designed to complement traditional grant funding 

with larger pools of sustainable private sector financing.

USAID draws on DCA guarantees to achieve its development goals and simultaneously 

strengthen host countries’ private sectors, helping to ultimately put USAID out of a job. Since 

1999, USAID has committed $5.5 billion in guaranteed lending across 80 countries with over 

400 partner institutions through DCA guarantees. USAID missions throughout the world design 

and implement DCA guarantees within their existing programs. This operational framework 

allows guarantees to be coupled with the USAID technical assistance that is needed to make 

guarantees as effective as possible and, in many cases, lead to more sustainable, market-changing 

impacts. 

Technical assistance designed to complement guarantees covers a wide range of activities 

tailored to the specific needs of individual transactions including regulatory reform, feasibility 

studies, market landscaping, development of lending strategies and products, financial literacy 

and business development services for borrowers, and the training of loan officers. 

DCA takes a modern, enterprise-driven approach to increase lending to underserved borrowers 

across the full spectrum of USAID development priorities. This includes supporting expanded 

access to finance for small business owners, women entrepreneurs, agriculture producers, as well 
23 

as increasing investment into various sectors including at-risk communities, education, energy, 

environmental services, financial services and financial technologies (fintech), infrastructure, and 

water and sanitation.

 

To this end, the majority of DCA’s FY 2018 activities fell within four broad strategic priorities:

 

• Facilitating broad-based economic growth and job creation across sectors; 

• Improving access to affordable health care and water and sanitation services;

• Opening up new sources of private capital for financial institutions; and, 

• Supporting financial innovation through digital finance. 

 

Facilitating broad-based economic growth and job creation across sectors

Local small- and medium-sized enterprises (SMEs) are often unable to obtain suitable financing 

because of rural geographic constraints, high collateral demands, high interest rates, and a lack of 

loan products for SMEs. Such small businesses cite access to finance as a major obstacle to 

making new investments and growing their businesses. Lenders may have doubts about the 

fundamental competitiveness of SMEs, and/or they are reluctant to lend to SMEs that do not 

have sufficient collateral or operating history. Strengthening local lenders’ ability to finance 

SMEs in productive sectors of the economy fosters economic growth in developing countries. In 

FY 2018 DCA continued to support economic growth and job creation through supporting access 

to finance for SMEs across sectors.

 

In the Philippines, a $15 million loan portfolio guarantee to 1st Valley Bank, a local commercial 

bank, will facilitate lending to agribusinesses and SMEs in Mindanao. Borrowers under the 

guarantee will be agribusinesses engaged in production, processing, and distribution and general 

SMEs. As a result of this guarantee, there will be an estimated additional 150 SMEs and 

agribusinesses with access to financing, including those without clear land titles, allowing for 

sustained growth and improved employment opportunities. 

 

An $83.3 million loan portfolio guarantee to the Food Securities Fund will facilitate lending to 

the agriculture sector in up to 39 countries in which USAID operates across Africa, Asia, and 

Latin America and the Caribbean, of which half the guaranteed lending will be targeted in U.S. 

Government Feed the Future initiative countries. The guarantee will provide more efficient and 

scalable credit channels for agricultural aggregators working with cooperatives and smallholders 

in emerging markets. Borrowers under the guarantee will be medium-sized enterprises that 

provided inputs and services down the value chain for smallholders. The result of this guarantee 

will be increased availability of affordable debt financing along the agricultural value chain, 

which will increase economic growth in the sector and contribute to enhanced food security. 

 

The clean energy loans will be used by SMEs for small-scale renewable energy production such 

as rooftop solar, and energy efficiency projects such as industrial equipment modernization, and 

investments in energy efficient building materials, motors, and heating and cooling systems. 

These guarantees are expected to result in the expansion of the availability of credit for at least 

150 SMEs across the region. 

 
24 

Within the general SME sector, DCA partnered with financial institutions to stimulate economic 

opportunities for specific underserved populations. For example, USAID provided a $6.8 

million loan portfolio guarantee to the First Microfinance Company, a local commercial 

microfinance institution (MFI) in the Kyrgyz Republic, to support inclusive lending to SMEs, 

including businesses owned and managed by women or youth, and early-stage businesses. In Sri 

Lanka, a DCA guarantee with local commercial banks, Hattan National Bank and Sampath Bank, 

will strengthen lending to micro-, small- and medium-sized enterprises (MSMEs) and youth 

entrepreneurs across all sectors. As a result of this guarantee, it is estimated that over 1,000 

businesses and young entrepreneurs will have access to loans to start and expand their business 

operations and create job opportunities within Sri Lanka. 

 

Improving access to affordable health care and water and sanitation services

In Kenya, a $20.9 million loan portfolio guarantee to the Water Infrastructure Management 

Company will support lending to water service providers for utility-level water and sanitation 

projects. This project will help improve the quality of, and increase access to, water and 

sanitation services by increasing networked connections, improving service quality and 

sustainability, and developing alternative technological solutions. As a result of this guarantee, it 

is estimated that over 800,000 people will receive first-time or improved access to water and 

sanitation services. 

 

In support of increased access to quality health care, USAID provided a $6.5 million loan 

portfolio guarantee to Ecobank to encourage lending to health care providers for the treatment of 

malaria or the expansion of family planning services in Ghana. Similarly, in India, USAID 

entered into a $50 million loan portfolio guarantee with IndusInd Bank Limited to facilitate 

lending to private Indian healthcare enterprises such as hospitals, clinics, homecare providers, 

medical device companies, pharmacies, etc. These enterprises provide a range of family 

planning and reproductive health and maternal and child health services to a range of clients, 

including vulnerable populations, thereby improving access to affordable and quality health care. 

 

Opening up new sources of financing for financial institutions 

A $20 million bond guarantee in Tanzania with the bond trustee, CRBD Bank, will support 

lending to the bond issuer, FINCA Microfinance Bank Limited, for the purpose of expanding its 

financial product offerings to base-of-the-pyramid clients in Tanzania. Currently, most 

microfinance institutions (MFIs) access wholesale lending at high interest rates, which limits 

both their ability to expand their borrower base, as well as to offer lending at affordable rates. 

Accessing the local capital markets by issuing this bond will allow FINCA Microfinance Bank 

Limited to both expand its lending and lower the interest rates it offers. As a result of this 

guarantee, FINCA Microfinance Bank Limited will be able to double its loan portfolio, and 

subsequently deploy an additional 30,000 loans annually to more vulnerable and underserved 

borrowers.

 

A $20.1 million loan portfolio guarantee with Ayeyarwady Bank, a local commercial bank in 

Burma, will facilitate local currency lending to MFIs and agricultural SMEs. Borrowers will be 

local and international MFIs operating in Burma engaged in lending to smallholder agriculture 
25 

producers, microenterprises, and SMEs operating along agricultural value chains. Currently, 

most commercial banks do not lend to MFIs or SMEs and those that do demand very high and/or 

cumbersome collateral, usually in cash or land. MFIs are also relying on foreign currency loans, 

which are hedged at great expense, constraining access to finance for these marginalized 

borrowers. This guarantee will directly address this area by facilitating local currency loans to 

MFIs and SMEs on improved terms. 

Supporting financial innovation through digital finance

In Kenya, USAID provided a $9.4 million loan portfolio guarantee to Musoni Microfinance to 

facilitate lending to the agriculture sector. Borrowers under this guarantee will be smallholder 

farmers, MSMEs, and farmer cooperatives engaged in agriculture. As a result of the guarantee, 

Musoni Microfinance will scale new digital lending approaches to serve smallholder farmers and 

rural agribusinesses. Approximately 15,000 underserved borrowers will benefit from financing 

under this guarantee. 

 

A $10 million loan portfolio guarantee to Kingson Capital Fund, a local venture capital fund, 

will support lending to black-owned SMEs and technology enterprises in South Africa with an 

emphasis on youth. A primary source of Kingson’s pipeline will come from FinFind, an online 

platform that links borrowers seeking finance with matching funders. As a result of this 

guarantee, investors will “crowd-in” additional private sector lending by providing finance to 

approximately 35 to 40 black-owned and technology businesses across South Africa. 
26 

Appendix D: Budget by Object Class

Budget Object Class

FY 2018 FY 2019 FY 2020

ACTUAL ENACTED REQUEST

OPIC DCA OPIC1 DCA USIDFC

Personnel Compensation & Benefits 53,301,819 3,637,818 51,325,205 3,969,807 62,915,027 

Travel and transportation of persons 417,815 536,438 196,000 550,000 6,013,000 

Rental payments to others 140,661 7,440,856 7,679,669 

Communications 1,238,263 240,000 1,092,505 265,000 1,082,078 

Printing and reproduction 146,172 106,917 114,000 

Other contractual services 16,120,088 4,511,086 13,122,607 4,080,675 8,572,136 

Advisory and assistance services 2,895,848 5,283,398 3,977,782 

Representation Expense 35,000 35,000 35,000 

Other goods and services from Federal sources 387,896 510,657 515,353 

Operation and maintenance of facilities 246,910 361,915 1,148,132 401,750 1,149,192 

Operation and maintenance of equipment 2,214,849 2,063,405 2,786,983 

Supplies and materials 1,648,335 60,000 1,541,097 60,000 2,283,979 

Equipment 406,343 63,648 630,000 66,000 775,801 

Land and structures 589,095 100,000 606,768 100,000 

Total 79,200,000 10,000,000 84,595,779 10,000,000 98,000,000 

1 Carry-Forward balances from prior fiscal years enable obligations greater than the current year appropriation.