Strategic Directions for the United States International Development Finance Corporation (DFC)

September 24, 2019

The United States International Development Finance Corporation (DFC) will merge the staff, assets, and liabilities of the Overseas Private Investment Corporation (OPIC) and the U.S. Agency for International Development’s (USAID) Development Credit Authority (DCA). It will seek to catalyze vitally needed private sector investments in low- and lower-middle-income countries through new development finance tools such as local currency loans, first-loss guarantees, and equity investments.

However, the DFC is not designed to be simply another development finance institution—in addition to a greater proposed focus on development impact, it is an agency also embedded in the U.S. foreign policy and national security architecture. This report offers concrete and independent ideas on how the DFC can better support U.S. national security interests while also examining the new agency’s limitations. Within this context, the three key U.S. national security challenges that CSIS highlights include a) China’s rising influence in the developing world, b) actions the United States and others can do to further mitigate violent extremism, and c) addressing the root causes of migration.

This report is made possible by the Smith Richardson Foundation’s generous support to CSIS.