U.S. Development Finance Corporation expands its Portfolio for Impact

AFRICA – The U.S. International Development Finance Corporation (DFC) which replaced OPIC earlier this year, is adding new financing tools and increasing its ticket sizes of its small business-focused Portfolio for Impact.

The lending program, launched in 2014 to support emerging markets social enterprises supporting local small businesses and access to basic services, like energy, healthcare and education, reached US$100 million in 2019.

It has invested in 22 projects and enterprises, including Kenya-based produce logistics company Twiga.

The expanded initiative renamed Portfolio for Impact and Innovation, or Pi2, gives DFC the flexibility to invest up to $900 million via debt, equity and other mechanisms, like insurance and technical assistance. The fund’s largest ticket size is doubling to US$10 million.

Portfolio for Impact and Innovation is among the first DFC’s early impact initiatives since officially transitioning from OPIC. It is also expanding its women-focused 2X Challenge. A US$30 million loan to India’s Sitara will expand mortgage financing for low-income households.

The new DFC also has made early commitments to gas projects in Latin America and Africa that may boost “development” but not always with positive environmental impact.

In Africa, Adam Boehler, CEO of the US International Development Finance Corporation (DFC), announced the first disbursement of a US$40mn loan to Tetra4 Proprietary Ltd to support the development of critical gas infrastructure and advance energy security in South Africa in 2019.

The announcement was made at the Africa Investment Forum in Johannesburg, South Africa.

Tetra4 will launch the first phase of the development and commercialisation of a natural gas and helium field in South Africa.

The loan will also support the construction and operation of a natural gas gathering pipeline as well as a micro-scale liquefied natural gas and helium liquefaction plant.

DFC gave Egypt US$430 million in insurance to advance energy security. The advancement of energy security will be achieved through rehabilitating a natural gas pipeline and transporting natural gas from fields offshore in Israel, Boehler explained.

The insurance was to enable Noble Energy Inc. of Houston, Texas to restore the 90-kilometer EMG Pipeline running from the coastal city of Ashkelon, Israel and under the Mediterranean Sea to its destination in Al-Arish, Egypt.

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