Covid-19: DFC announces $4bn facility for its existing projects
Posted on: 27 May, 2020 at 9:34 AM
The U.S. International Development Finance Corporation (DFC) board of directors has approved the agency’s new rapid response liquidity facility. The facility will provide up to $4 billion in additional financing for existing DFC projects that have been particularly impacted by the challenges of the Covid-19 global pandemic.
“Congress created DFC to help tackle the world’s most difficult development challenges,” said DFC CEO, Adam Boehler. “Our development mission is more important than ever in the face of Covid-19. DFC will stand by our partners so that we can continue our work in emerging markets around the world.”
DFC has been working closely with clients to monitor and mitigate the impacts of Covid-19 so their projects can continue to deliver the development outcomes intended. These impacts have ranged from microfinance institutions struggling to collect payments to infrastructure projects experiencing major delays to businesses in the hospitality sector suffering precipitous revenue declines.
Although the nature of impacts varies, significant need exists across DFC’s portfolio for additional liquidity to fund working capital needs and essential activities. Access to adequate capital is critical to ensuring that the agency’s clients can maintain operations and continue advancing private sector-led development around the world. However, liquidity from traditional investors is scarce as capital continues to flee emerging markets during this time of uncertainty.
DFC’s rapid response liquidity facility will enable the agency to respond quickly to client needs by delegating authority to the agency’s CEO to approve follow-on support for existing projects that would have ordinarily required board approval. It also authorises the CEO to approve changes to the use of proceeds for previously approved projects to address important working capital needs. The board will be regularly updated on the use of delegated authorities.
DFC will provide up to $4 billion in support under the facility. All follow-on support approved under the facility will be limited to 100% of the support previously approved for that project by DFC. Requests will undergo the agency’s rigorous approval processes and be assessed on the basis of reasonableness, appropriateness, and other factors. Interested clients should contact their DFC point of contact for more information on eligibility and how to apply.
The facility represents a key component of DFC’s broader response to both the health-related and economic impacts of Covid-19. Most recently, the agency announced a call for proposals under a new health and prosperity initiative. DFC will invest up to $2 billion through the initiative to respond to Covid-19 and strengthen health resilience in developing countries.
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