U.S. International Development Finance Corporation

Organizational profile: 

The U.S. International Development Finance Corporation (DFC) is the United States Government's development bank. DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today. It invests across sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets. DFC investments adhere to high standards and respect the environment, human rights, and workers’ rights. 

DFC’s work in the climate mitigation, adaptation, and resilience sectors includes support for projects that are expanding insurance for smallholder farmers, advancing ecosystem conservation, and building climate-resilient infrastructure. 

DFC provides the following financial solutions in emerging markets: 

• Debt Financing: Direct loans and guaranties of up to $1 billion for tenors as long as 25 years, with specific programs targeting small and medium U.S. businesses 
• Equity Investments: DFC direct equity investments can provide critical support to companies committed to creating developmental impact 
• Feasibility Studies: Support for the analysis of a potential DFC project 
• Investment Funds: Support for emerging market private equity funds to help address the shortfall of investment capital 
• Political Risk Insurance: Coverage of up to $1 billion against losses due to currency inconvertibility, government interference, and political violence including terrorism. DFC also offers reinsurance to increase underwriting capacity 
• Technical Assistance: Support to increase the developmental impact or commercial sustainability of existing DFC projects or develop potential DFC projects 

Financing Instrument: Equity, Loans, Risk Insurance, Technical Assistance 

Project scale:  Direct loans and guaranties of up to US$1 billion for tenors as long as 25 years, with specific programs targeting small and medium U.S. businesses.

Forest-related investments have included a US$22 million direct loan to support the expansion of sustainable forestry on degraded land in Colombia.   

Applicable geographical regions/country groups: Low and lower middle-income countries 

Eligibility Criteria:

DFC supports projects in a variety of industries from critical infrastructure to power generation, healthcare, agriculture, technology, and financial services. 

All projects DFC supports must be based in countries where DFC is authorized to do business, meet DFC investment standards, and have a strong track record in the industry.  

DFC prioritizes investments in low and lower-middle income countries and may consider investments in certain projects in upper-middle income countries that address key agency priorities. 

DFC evaluates every project using its performance measurement tool, Impact Quotient (IQ) to measure, monitor, and evaluate its developmental impact around the world across three main areas:  

1. Growth includes contribution to GDP through improved infrastructure and the generation of local income, fiscal benefits to the local economy, and support for direct and indirect job creation 
2. Innovation includes the strengthening of markets, innovation in financial structures and business models that mobilize private capital, and knowledge or technology transfer 
3. Inclusion includes benefits to marginalized populations such as women or people living in rural areas, small and medium enterprises, and underdeveloped geographies   

Evaluation of prospective fund managers for equity investment considers the following criteria: 

• Strategy: Investment thesis, origination capability, pipeline, structuring, value creation, exit thesis, and competitive positioning 
• Team: Geographic and sector experience, alignment, culture, governance, processes, record of collaboration, reputation, leadership, and depth of team; first-time managers and/or pioneer strategies will be considered 
• Track record: Attribution, value creation, value recovery, lessons learned, and relevance to fund strategy 
• Fundraising: Potential and capacity to close with limited partnerships compatible with DFC 
• Fund terms: Strong governance and economic alignment, as well as ability for co-investment participation

Application guidelines: 

DFC strongly recommends that potential finance applicants contact a DFC finance or insurance officer to discuss the project proposal prior to beginning the application process. The finance officer will direct you to the appropriate application form and identify the supporting documentation that may be required. Officers can be contacted through email at applydevcred@dfc.gov. Applications are generated and submitted through DFC’s forms dashboard. 

DFC seeks to unlock high-quality private investment to support climate adaptation solutions for vulnerable communities, with priority to low and lower-middle income countries. If you are a small or medium enterprise that’s helping provide tools and capabilities to adapt to the impacts of climate change, visit this link or contact adaptation@dfc.gov to learn more about submitting a business proposal for DFC support:  https://www.dfc.gov/sites/default/files/media/documents/Climate%20Adapta...  

Last updated: 13 September 2023