Q&A with Vibhuti Jain
Regional Director for Africa, DFC
Q: What is DFC and how does it differ from OPIC?
A: U.S. International Development Finance Corporation (DFC) is America’s development bank. DFC partners with the private sector to finance solutions to the most critical challenges facing the developing world today. We invest 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 worker rights.
DFC was created by legislation passed by Congress and signed by the President called the Better Utilization of Investments Leading to Development Act, or BUILD Act. We officially opened our doors in January of this year and are the successor agency to the Overseas Private Investment Corporation (OPIC). We also added the talented team from USAID’s Development Credit Authority, a credit guarantee program, in an effort to streamline development finance offered by the U.S. Government. DFC has the benefit of OPIC’s infrastructure, experience, and pipeline, with several key enhancements.
First, DFC has more than double the capital exposure limit. We went from $29 billion as OPIC to $60 billion as DFC. This means we have more capital to deploy and are looking for more deals to finance across the globe, including in Africa. In addition, we prioritize transactions in low-income countries and lower middle-income countries, and since Africa has the highest concentration of these countries, we are particularly focused on growth on the continent.
Second, DFC has more financing tools available and more flexibility to deploy existing tools. In addition to OPIC’s traditional loans, loan guarantees, and political risk insurance, for the first time ever we have the ability to make equity investments. We can now also complement our long-term financing with technical assistance and feasibility studies. Further, we have modified OPIC’s 25 percent U.S. shareholding requirement to a more flexible U.S. preference, allowing us to be more active in markets that may be new to U.S. businesses and investors but are in great need of investment in development or are critical to U.S. foreign policy.
Finally, DFC is committed to increasing its presence and development impact in Africa. We will do this by working in close coordination with other regional and multilateral institutions in Africa as well as with our colleagues in different parts of the U.S. Government to take a more collaborative and wholistic approach to advancing development in Africa. In fact, our CEO Adam Boehler is the Executive Chairman of the Administration’s Prosper Africa program, an initiative that channels the tools and resources of many U.S. Government agencies to increase two-way trade and investment between the United States and Africa. In addition, we are building out a regional team in Africa, which I am managing from Johannesburg, South Africa. This team will allow us to more proactively source investment opportunities in Africa, be more accessible to regional clients, and provide real-time country context and guidance on trends and opportunities in the region.
Q: What are your top priorities for 2020 and beyond?
A: First and foremost, DFC is contributing to the Administration’s whole-of-government response to the COVID-19 global pandemic and supporting affected individuals and communities in Africa and around the world. DFC’s enhanced resources, tools, and flexibility will be critical to these efforts. This year, we are also committed to growing our pipeline of transactions and advancing investments that deliver meaningful impact, including through investments in healthcare and financial services. Additionally, in Africa, we are particularly interested in investing in critical infrastructure such as ports, projects that facilitate transportation and logistics, and information and communications technology (ICT) as well as agriculture. We are committed to helping Africa build more robust ICT networks, including through the deployment of advanced technology, which will create significant opportunities for businesses.
Q: What role does DFC play in promoting connectivity across the African continent?
A: Connectivity is an important objective for DFC in Africa. Our Connect Africa initiative mobilizes investment in three key areas: 1. ICT including internet, wireless networks, and cell phones, which improve the way people work, access healthcare and education, and conduct business; 2. value chains processes that connect the producers of raw materials to end users, enhance value, and help farmers and other producers reach new markets; and 3. transportation and logistics physical infrastructure such as roads, railways, ports, and airports as well as warehouses and cold storage, which are essential to facilitating cross-border trade and connecting Africa to the world.
We are actively looking for private sector-led opportunities in these areas where we can put our capital to work and improve the connectivity of African households and businesses.
Q: How has COVID-19 affected operations? Have any specific initiatives been into place as a result of the virus?
A: DFC is committed to supporting the Administration’s whole-of-government response to the global pandemic. As America’s development bank, DFC is ready to invest in private sector solutions to support individuals and communities. We are working with existing clients to mitigate the impact of COVID-19 on their businesses so that their projects can deliver the long-term development impact intended. DFC is also actively exploring opportunities to make its financing tools available to support both the health and economic response, including by supporting healthcare systems and injecting liquidity into markets struggling to overcome the economic impact of COVID-19. DFC’s ability to mobilize significant financial resources and bring technical expertise to businesses responding to urgent challenges around the globe is more important than ever during this difficult time.
Q: What opportunities exist for ICT and other companies in Africa to work with DFC?
A: The opportunities are vast. Africa is a leading priority for DFC and the development of strong ICT networks is central to the agency’s goals in the region. We are committed to helping Africa build more robust ICT networks, including through the deployment of advanced technology as well as data centers that support system backbone infrastructure.
At the consumer level, there are still a number of countries in Africa where 20 percent of the population or more does not have a mobile phone, let alone a smart phone, and only about 40 percent of Africans have access to the internet. As the continent’s middle class continues to grow and economies develop, we anticipate an increase in demand for 21st-century ICT and significant opportunities for businesses that can respond to this need.