Corker, Coons Introduce Bill to Modernize U.S. Approach to Development Finance
Legislation to Establish Single, Self-Sustaining U.S. International Development Finance Corporation
WASHINGTON – U.S. Senators Bob Corker (R-Tenn.) and Chris Coons (D-Del.), both members of the Senate Foreign Relations Committee, today introduced bipartisan legislation to promote sustainable growth in developing economies through U.S. business investment and provide more accountability for taxpayers at no expected cost. The Better Utilization of Investments Leading to Development Act of 2018 (S.2463, the BUILD Act) will establish a single, full-service, self-sustaining international development finance entity to reform and streamline the tools of multiple agencies with an emphasis on free-market principles. The concept was outlined in the president’s FY 2019 budget request (Pg.81). The development finance corporation will leverage the U.S. private sector’s expertise and investment capital to generate economic growth in the developing world that will support American interests. Cosponsors are Senators Johnny Isakson (R-Ga.), Chris Murphy (D-Conn.), Todd Young (R-Ind.), Jeanne Shaheen (D-N.H.), Rob Portman (R-Ohio), and Tim Kaine (D-Va.).
“Taking a free-market approach to development finance will provide more accountability for taxpayers at no expected cost, create new opportunities for U.S. businesses to invest overseas, and expand American influence around the world,” said Corker. “The president embraced this concept in his budget because sustainable growth in the developing world promotes U.S. interests in security and stability while expanding markets for American companies. I am proud to join Senator Coons in this effort and look forward to working with my colleagues to make it a reality.”
“The bipartisan BUILD Act will create a 21st century development finance institution with the full suite of tools to attract private sector investment to low income countries,” said Coons. “This new institution will make targeted investments to reduce poverty in countries that are critical to our national security. I look forward to working with my cosponsors to pass a strong bill that helps make markets work throughout the developing world.”
The BUILD Act will establish the U.S. International Development Finance Corporation (IDFC), assuming the activities of the Overseas Private Investment Corporation (OPIC), USAID’s Development Credit Authority, USAID’s Enterprise Funds, and USAID’s Office of Private Capital and Microenterprise.
The IDFC will operate in low and lower middle-income countries where it furthers the U.S. national security and economic interests and where the project can be shown to have a demonstrable development outcome. Congress will maintain oversight of the IDFC by reviewing the agency’s public reports on its development impact and through independent audits and the establishment of an inspector general in the corporation.
The IDFC will have the authority to: issue direct loans, including local currency loans; issue guaranties, including local currency guaranties; provide political risk insurance; fund first losses; participate in equity investments; provide technical assistance; make limited grants to unlock larger investments; and attract private sector talent.
Next Article Previous Article