U.S. International Development Finance Corporation (DFC)
Changes from August 29, 2025 to May 1, 2026
This page shows textual changes in the document between the two versions indicated in the dates above. Textual matter removed in the later version is indicated with red strikethrough and textual matter added in the later version is indicated with blue.
DFC, a federal agency, uses financial tools to promote private investment overseas. Its purpose is to advance U.S. development and foreign policy interests, accounting for economic and financial soundness of projects. DFC is authorized by the Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act, P.L. 115-254, Division F; 22 U.S.C. §§9612 et seq.), which reflected congressional interest in countering China's "One Belt, One Road" initiative and elevating U.S. development finance impact. The BUILD Act consolidated several development finance authorities under DFC, giving it more functions, a larger financing cap, and a multiyear authorization. Congress renewed DFC in December 2025.
Reauthorization Act: Select Provisions
Congress renewed DFC authorities for six years, through December 2031, in the DFC Modernization and Reauthorization Act of 2025 (P.L. 119-60, Division H, Title LXXXVII). Amending the BUILD Act, the act expanded DFC eligibility to higher-income countries and raised DFC's maximum contingent liability (MCL, total amount of risk from its activities that DFC can have outstanding at a time) from $60 billion to $205 billion. It also created a Chief Strategic Officer and Congressional Strategic Advisory Group, authorized a new fund to ease budgetary constraints on equity investments, and subjected Board of Directors meetings to public access requirements. A sense of Congress states DFC should not divert resources for domestic activities beyond its "core" mission. The reauthorization left open some issues, including whether DFC should take on more foreign aid responsibilities or be absorbed into the Department of State, and whether and how DFC should balance its mandates and prioritize sectors and regionsDFC, a federal agency, uses financial tools to promote private investment in less-developed countries. Its purpose, by statute, is to mobilize private capital to advance U.S. development and foreign policy interests, taking into account its projects' economic and financial soundness (see text box). DFC's seven-year authorization is to expire in October 2025, after which DFC would need legislative action to issue new financing. In the context of debate over reauthorization and potential reform, Congress may consider DFC funding, leadership and structure, and role in the changing foreign policy and trade policy landscape.
DFC History and Authorizing Legislation
Two distinct but overlapping rationales emerged in Congress to establish DFC. One sought to enhance U.S. development finance impact. A second focused on expanding U.S. policy tools to counter China and its "One Belt, One Road" initiative. Launched in late 2019, DFC is authorized by the Better Utilization of Investments Leading to Development Act of 2018 (BUILD Act, Div. F of P.L. 115-254, 22 U.S.C. §§9612 et seq.). This law replaced the Overseas Private Investment Corporation (OPIC) with DFC and transferred the Development Credit Authority (DCA) from the U.S. Agency for International Development (USAID) to DFC. It gave DFC new functions (e.g., equity), a larger financing cap ($60 billion), and a multiyear authorization.
Overview
Organization. The BUILD Act vests all DFC powers in a Board of Directors with presidentially appointed and Senate-confirmed members. The Board's nine statutory positions are held by the Chief Executive Officer (CEO)CEO; the Secretaries of State (Chair), the Treasury, and Commerce; the USAID Administrator; and four nongovernmentU.S. Agency for International Development (USAID) Administrator (Vice Chair); and four non-government members (three-year terms, renewable once). The Secretary of State is Board Chair, and the USAID Administrator is Vice Chair. In addition, byBy statute, DFC operates under the Secretary of State's general foreign policy guidance. The Board is to meet quarterly, and a quorum is five members. The Board has delegated some approval and oversight powers to the CEO. The Board has eight positions filled, including an Acting CEO and the Secretary of State dual-hatted as Chair and Vice Chair. President Trump's nomination of Benjamin Black to be CEO is pending Senate consideration. Other officers bySenate confirmed Benjamin Black as CEO in October 2025. Eight of the nine Board positions are filled; one non-government seat is vacant and the Office of Management and Budget's Deputy Director is performing the USAID Administrator's duties.
Other positions in statute include the Deputy CEO and Inspector General (IG), who also are presidentially appointed and Senate-confirmed,; and the Chief Risk Officer, Chief Strategic Officer, and Chief Development Officer, who are CEO-appointed and Board-approved (USAID Administrator concurrence is required for the latter). DFC has both reorganized. DFC also has restructured internally and created other issue-specific positions without legislative action.
Tools. DFC is authorized to provide the following:
DirectDirect loans and loan guarantees, with transactions up to $1 billion for 5- to 25-year terms for projects and investment funds,for projects and investment funds, generally for up to 25-year terms and subject to federal credit law.- Political risk insurance
coverage of up to $1 billion against losses due toagainst risks such as currency inconvertibility, expropriation, and political violence; and reinsurance to increase underwriting capacity. Equity investmentEquity investments in projects or investment funds, withlimits of 30a limit of 40% of any project's equity valueand 35% of DFC's portfolio-wide financing cap.- Grant-based
feasibilityfeasibility studies and technical assistance to support identification and preparation of projects, usually to increase development impact or commercial sustainability; DFC aims to share costs with recipients.
. By statute, DFC can provide no more than 2.5% of its lending cap (i.e., $5.125 billion) for a single entity. DFC activities are backed by the U.S. government's full faith and credit. DFC is to charge loan interest, insurance premiums, and other fees for its products, minimizing cost to the government. Use of DFC depends on client demand. Prospective clients generally submit an application that DFC assesses against its policies and priorities. DFC occasionally issues sector-specific requests for proposals. Use of DFC depends on client demand.
Financing Parameters. The BUILD Act sets requirements and limitations for DFC activity by country and by project. DFC must prioritize support for low- and lower-middle-income economies. It may provide support in upper-middle-income economies if such support is certified to advance U.S. economic or foreign policy interests and is designed for development impact. Energy projects in parts of Europe and Eurasia are exempted from these limitations (P.L. 116-94, Div. P, Title XX). DFC must complement, not displace, private capital. It also must favor projects involving U.S. persons, and consider environmental and social impact, worker rights, human rights, and countries' compliance with trade obligations and embrace of private enterprise.
Financing Parameters. DFC's financing eligibility is based on several considerations, most prominently income restrictions tied to World Bank-determined measures of country income and wealth. The amended BUILD Act: Other requirements include for DFC to: ensure its support complements, not displaces, private capital (to be "additional"); favor projects involving U.S. persons; and consider environmental and social impact, worker and human rights, and countries' embrace of private enterprise.DFC administers internal policies
DFC management and structure. Itsoperations. Environmental and Social Policy and Procedures (ESPP) outline DFC's approach to assessing, last updated in 2024, outline how DFC is to review applications and monitoring active projects. DFC has also set certain financing restrictions, such as a net-zero carbon emissions target by 2040 under the Biden Administration. DFC has used anmonitor projects. A 2023 Transparency Policy sets public information processes. DFC uses a "Impact Quotient" (IQ) tool to quantitatively assess likely development impact. IQ details do not appear to be profiled on DFC's website, to date. A 2023 Transparency Policy guides DFC's public information processes. DFC monitors projects for credit risks and other issues. DFC's FY2022-2026 strategic plan is oriented on four goals: private sector outreach, development impact, internal performance, and scaling up operations.
Recent Funding and Activityassess quantitatively likely development impact. DFC also monitors projects for risks.
Funding. Congress funds DFC through a Corporate Capital Account (CCA), which includes both appropriations and collections (e.g., fees, interest). DFC also has a "program account," which finances most DFC credit activities and has been composedconsisted of transfers from the CCA and other agencies. For each of FY2024 and FY2025, DFC received $990.5
For FY2026, Congress gave DFC $983.3 million in base appropriations, with $426435.8 million in revenues as offsetting collections, being credited to the Treasury, for a final effective appropriation of $563.7547.5 million (see Figure 1). For FY2026FY2027, the Trump Administration requested $810.2803.7 million in base DFC funding, 18.2% less than the FY2025 enacted level ($230.0 million for administrative expenses, $573.0 million for programs, and $7.2 million for the IG), and separately $3.0 billion in "mandatory" funding to "expand DFC's equity tool for strategic investments."
|
|
In FY2024, DFC committed $12 billion for 181 new transactions in 44 economies. Its active portfolio was nearly double the $26 billion that it inherited from OPIC (see Figure 2). DFC has supported multiple issue-focused efforts. Examples have been DFC-specific (the 2X Women's initiative), interagency (Power Africa), and international (on health with other countries). Since 2023, DFC has updated its ESPP, reorganized its units by sectors rather than tools, and opened new overseas offices.
Under the second Trump Administration, DFC shows a marked slowdown in project approvals, with two approvals at its FY2025 third quarter Board meeting, compared with 42 at the same meeting in FY2024. Some Administration steps indicate DFC activity may accelerate in coming months. In March, President Trump delegated authority to DFC under the Defense Production Act (DPA), the same authority he used in his first term for COVID-19 responses, to finance domestic mineral production. In April, the Administration announced that the Treasury would work with DFC and Ukraine to establish a U.S.-Ukraine Reconstruction Investment Fund, for natural resource projects in Ukraine. DFC issued a request for information on fund management. The FY2026 budget request seeks DFC funding to advance U.S. foreign policy, national security, and economic statecraft interests by prioritizing investments in critical minerals, supply chains, energy, technology, infrastructure, and countering China.
Select Issues for Congress
As DFC's authorization sunset approaches, the 119th Congress faces questions of agency funding, staffing, priorities, and authorities. Members could consider a "clean reauthorization" without changes beyond the sunset date, reform and renewal of the agency's authorities (e.g., 118th Cong., H.R. 8926), or termination of DFC. Congress may also act through appropriations legislation, which has been used to require reporting, direct sector priorities, and set agency decisionmaking guardrails. Senate consent or rejection of DFC leadership nominees may also influence DFC direction. Possible issues include the following:
Foreign Affairs Institutional Overhaul. The Trump Administration announced a broad freeze, review, and restructuring of U.S. foreign assistance, including the abolishment of USAID. Some stakeholders have also proposed moving some aid agencies, or parts of them, into DFC. Members may assess whether such steps require congressional action and contemplate how DFC fits in the foreign affairs interagency process, as well as whether DFC's existing authorities and structure require adjustment to accommodate any foreign affairs institutional changes. For example, Members may assess whether abolishing USAID prompts DFC Board changes, given that the USAID Administrator is to be the DFC Board Vice Chair. They also may seek clarity on the pace of DFC's project approvals and set annual investment targets.
Mandates. Under policies branded as an "America First" agenda, President Trump has directed that all foreign assistance align with the President's foreign policy, including to "champion core American interests," and has sought to reshore investments and strengthen U.S. supply chains. Congress may consider whether such actions align or diverge with U.S. policy in the BUILD Act. Members supportive of the President's actions may consider modifying the BUILD Act to allow DFC financing in the United States and in other high-income economies. Members prioritizing DFC's development mandate may oppose allowing investments in high-income economies.
Financing Parameters. Some Members have sought to steer DFC activities toward BUILD Act objectives, such as countering strategic competitors' economic influence and fostering development impact overseas. They may calibrate DFC's financing parameters to balance those aims, such as by limiting support for projects that do not counter financing by China, or targeting highly developmental projects. They also may assess these parameters against the Trump Administration's priorities (e.g., to assess DFC's screening of countries for trade obligation compliance against the Administration's focus on "unfair" trade practices).
Source: CRS, based on P.L. 119-75.
Source: DFC, Annual Management Report, Fiscal Year 2025. Notes: Risk adjustment of $0.4b that reduces portfolio is not shown. Some Trump Administration steps indicate DFC activity may accelerate. DFC has a lead role in a minerals-focused U.S.-Ukraine Reconstruction Investment Fund announced in 2025. President Trump gave DFC authority to make domestic mineral investments under the Defense Production Act of 1950. DFC also announced a maritime reinsurance plan with $20 billion in DFC support amid the Iran conflict. The FY2027 budget request seeks to advance U.S. policy in critical minerals, transportation infrastructure, energy, health, food security and agribusiness, and financial infrastructure; as well as to strengthen U.S. supply chains. Reauthorization Implementation. DFC's reauthorization and FY2026 appropriations mandated several actions. DFC is to engage with Members on the new Congressional Strategic Advisory Group to develop a Strategic Priorities Plan; develop policies on investing outside of less-developed countries; and propose language to guide use of its new revolving equity fund authority. Congress may track implementation of DFC reauthorization and consider whether to modify the BUILD Act further. Mandates. The FY2027 budget request states that DFC's congressional mandates to advance U.S. foreign policy and economic development "are not mutually exclusive," noting that investments can be "a stabilizing force in developing and post-conflict economies" and "an important tool for foreign policy," such as "strategic competition." Congress could continue to deliberate on how DFC should prioritize its mandates and whether they are in tension. President Trump directed all foreign assistance to align with an "America First" agenda, and his foreign affairs priorities have not included promoting economic development in poor countries to date. DFC investments under the Trump Administration have been primarily in developed countries. DFC's focus on larger deals may jettison the small-credit facilities DFC absorbed from USAID. Members may engage on DFC's planned high-income investments for FY2026, its Strategic Investments Policy, and activities allocated under of the 10% high-income cap. A key avenue for engagement could be the new Congressional Strategic Advisory Group. The Administration also has emphasized trade policies to promote domestic industries, secure U.S. supply chains, and advance strategic competition. Congress may consider the efficacy of domestic financing by DFC; mandate DFC investments to address specific goals; or direct DFC to report on its competitiveness vis-à-vis foreign counterparts. Members who support DFC focusing less on development and more on strategic aims could seek to raise or remove the 10% high-income cap, or revisit "country of concern" designations, such as amid changing U.S.-Venezuela ties and the disposition of any China-bound oil under the Hormuz reinsurance facility.Equity. Federal accounting practice requires DFC to set aside more funds for equity activity than for lending. Some voice concern that this process limits DFC's use of equity, a tool which they argue enables DFC to partner more easily with early-stage firms. Others argue adjusting budget treatment of equity investment may not align with federal accounting principles. Legislative options include to score DFC equity similar to loans or enact equity-specific appropriations (S.Amdt. 3658 to S. 2296, 119th Cong.) (18.3% less than FY2026), with $435.0 million in offsetting collections, to result in a final effective appropriation of $386.7 million. It also requested $3.0 billion in "mandatory" funding for a revolving fund to support "strategic" equity investments.
Activity. In FY2025, DFC committed $3.6 billion for 30 new transactions; press releases indicated most were under the Biden Administration. This was a substantial stepdown from FY2024 ($12.1 billion), resulting in DFC exposure dropping from $48.9 billion to $43.4 billion over FY2025 (Figure 2). DFC press releases have included markedly less information under the current Administration, complicating efforts to assess the portfolio's direction. DFC has indicated it is likely to pursue fewer, larger deals moving forward. The approval process can take more than a year, leading to a lag between a strategic redirect and resulting investments.
Select Issues for Congress