US agency goes back to the future to take on China’s Belt and Road Initiative

The U.S. International Development Finance Corporation (DFC) is adopting a dual approach, merging national security objectives with development finance to challenge China's expansive Belt and Road Initiative (BRI). Analysts and officials note that the agency is strategically focusing on securing critical mineral supply chains as a key component of this strategy.

Established in 2019 under President Donald Trump's administration, the DFC distinguishes itself from China's model by prioritizing private-led projects over state-driven ones. The agency's operations span more than 100 countries, with a significant presence in Central and South America, Africa, Eastern Europe, and the Asia-Pacific region.

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The reauthorization endorsed the DFC’s development mission while giving the agency greater flexibility to pursue strategic deals tied to foreign policy and national security goals.

Erin Collinson, a senior fellow at the Centre for Global Development, highlighted the agency's expanded mandate following its reauthorization by the U.S. Congress in December. "The reauthorization endorsed the DFC’s development mission while giving the agency greater flexibility to pursue strategic deals tied to foreign policy and national security goals," she stated. This enhanced flexibility is supported by an increased portfolio cap, now set at $205 billion, providing ample room for the DFC to pursue both its development and strategic objectives.

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With the increase in the DFC’s portfolio cap to US$205 billion, there’s room to pursue both.