The United States International Development Finance Corporation (DFC) is expanding its investment strategy across Africa, with plans to direct financing towards critical infrastructure, natural resources, and productive sectors while using public capital to attract commercial investors into markets considered too risky.
The corporation’s expanded mandate gives it the capacity to deploy up to $205 billion over the next five years, a substantial increase from the initial $60 billion established when the agency was created in 2019.
Speaking at a media briefing, Jim Kelly, Vice President for the Office of Global Business Development at the DFC, said the expanded capacity would allow the corporation to pursue a wider range of investment opportunities and use different financing instruments to support projects across the continent.
He identified seven broad investment areas: energy, critical minerals, transportation and logistics, technology and telecommunications, healthcare, agriculture and financial services.
The strategy focuses on closing financing gaps that make it difficult for commercially viable projects to secure funding from private investors.
Kelly said the corporation was not looking to compete with commercial lenders but to provide financing where private investors may be unwilling to assume certain risks.
“We’re looking to address the risks and the financing gaps that could otherwise prevent something from moving forward,” he said.
To achieve this, the DFC can provide direct loans, project financing, equity investments, convertible bonds, guarantees and political risk insurance. It also offers project development support, including feasibility studies to help move proposed investments towards commercial viability.
Kelly said the corporation could provide loans extending up to 25 years, allowing it to support projects that require longer investment periods than conventional commercial financing typically accommodates.
Its priorities also extend beyond financing infrastructure to developing local industries and strengthening economic value chains.
In the critical minerals sector, for instance, Kelly said the DFC wanted to support activities beyond the extraction of natural resources, with greater attention to supply chains and the economic benefits host countries could derive from their mineral resources.
“Our focus is not simply to extract minerals. It’s more along the lines of supporting a broader value chain that can create that lasting economic ecosystem,” he said.
The corporation is also looking beyond mining for investment opportunities in healthcare, financial services, agriculture and agricultural supply chains, sectors it considers important to building sustainable economic activity.
Kelly explained that its approach involves working with other US government agencies, development partners and private-sector institutions to address institutional and technical gaps that could affect the success of investments.
The corporation has more than $14.5 billion in investment commitments across Africa, reflecting the continent’s importance to its international investment strategy.
Kelly said the agency was also strengthening its engagement with potential investors to identify opportunities earlier rather than waiting for projects to emerge through existing investment channels.
“I don’t want this to be a reactive agency. I want it to be a proactive agency,” he said.
The expanded strategy could offer African economies an additional source of long-term financing for infrastructure and productive industries as they seek to attract international capital. Kelly, however, maintained that the corporation would retain strict investment assessments, balancing economic development objectives with returns for American taxpayers and US strategic interests.
He said the DFC aims to support the development of sustainable economic ecosystems that can generate long-term growth beyond the completion of individual investment projects.
