[co-author: Mark Newberg]
If you’re a US investor interested in emerging markets, you will soon have access to much more capital thanks to the Better Utilization of Investments Leading to Development (BUILD) Act.
When the US International Development Finance Corporation (DFC), a new federal agency created by the BUILD Act, comes online, it will double the funds currently available to support American companies investing in the developing world.
DFC is replacing the Overseas Private Investment Corporation (OPIC), an agency Womble Bond Dickinson has represented in nearly 40 international development projects, including several that involve renewable energy such as off-grid and grid-deficit solar technology.
Jackie Camp , who’s worked on OPIC transactions for the past decade and leads WBD’s International Development Finance Team , says, “The DFC is expected by many to place increased emphasis on Africa and renewable energy. We’re excited to see what projects the new agency will be able to pursue with its increased budget and scope".
With an eye toward advancing US foreign policy and national security priorities, Congress established OPIC in 1971 to ease the financing challenges American businesses face with foreign direct investment in emerging markets. DFC will continue that work, making loans, supporting investment funds, taking equity positions in investments, and providing guaranties and political risk insurance up to a total of $60 billion. Unlike OPIC, DFC is also authorized to take an equity position in other ventures and has the ability to offer guarantees and make investments using local currency.
Perhaps one of DFC’s most substantial improvements, however, is that USAID’s Development Credit Authority (DCA) is now in-house. With DCA as a part of the agency, DFC will be able to better partner with local banks in developing countries to channel local private capital into US investments.
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