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The Trump administration intends to expand the mandate of the U.S.’s primary development agency, the U.S. International Development Finance Corporation (DFC), by allowing it to finance projects in high-income countries and quadrupling its spending power. This proposal, which was reviewed by Reuters, marks a significant shift from DFC’s previous focus on supporting poor nations through energy and critical minerals development and environmental protection.
According to the White House plan, the funding cap for the agency would increase from $60 billion to $250 billion, enabling it to operate more freely in high-income countries and take larger equity stakes. Until now, DFC had rarely funded projects in wealthy nations without special authorization. Additionally, the administration is proposing to add the U.S. Defense Secretary to DFC’s board for the first time, reflecting its enhanced national security mission.
Acting DFC head Dev Jagadesan stated that these changes would help the agency better support U.S. foreign policy, national security, and economic development goals. The proposal includes plans to increase staff numbers, make more equity investments, and gain greater flexibility in making large investments without congressional approval. A DFC official noted that the intent is to ensure the agency can “fulfill its mandate and be responsive to global investment needs.”
The proposal arrives during a government review of DFC’s governing rules, which are set for Congressional approval by early October. It also comes as DFC staff await the official appointment of Ben Black, Trump’s chosen successor. Although a White House spokesperson did not comment on the proposal, concerns were raised earlier this year about Black’s potential direction for DFC due to his criticism of its past support for environmentally friendly projects and his advocacy for investing in Greenland’s resources.
DFC was established in 2019 with the mandate to mobilize private capital to address development challenges and advance U.S. foreign policy priorities in developing countries. In fiscal year 2024, it committed $12 billion towards food, energy, health, and critical infrastructure projects and has total outstanding commitments of $49 billion.
DFC is now set to play a key role in an agreement between the United States and Ukraine that provides U.S. preferential access to new Ukrainian mineral deals in exchange for continued support for Ukraine’s response to Russia’s invasion. Ukraine, classified as an upper middle-income country by the World Bank, has initiated a call for proposals to find an administrator for the U.S.-Ukrainian Reconstruction Investment Fund, which aims to mobilize private investment in strategically important sectors.
The fund will invest in areas such as mining, hydrocarbons, and infrastructure.
📚 Reading Comprehension Quiz
According to the passage, what significant change does the Trump administration propose for the U.S. International Development Finance Corporation (DFC)?
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