Washington, DC – Today, House Foreign Affairs East Asia and Pacific Subcommittee Chairwoman Young Kim (CA-40) delivered an opening statement at her subcommittee hearing titled “Reauthorizing the U.S. Development Finance Corporation.”
Watch her remarks HERE or read her opening statement below.
Welcome to the East Asia and Pacific Subcommittee’s hearing on “Reauthorizing the U.S. Development Finance Corporation.”
I want to welcome and thank our witnesses for joining us today as we discuss the future of the U.S. International Development Finance Corporation, or DFC, which is a vital tool of American economic and foreign policy.
Thanks to the valuable efforts of our witnesses, the DFC was created through the 2018 BUILD Act. It built upon its predecessor, the Overseas Private Investment Corporation or OPIC, by integrating other development finance tools to better mobilize private capital.
Despite being a younger agency, DFC has demonstrated a significant step forward in enhancing our nation’s ability to promote private sector-led development in emerging markets, advancing U.S. national security interests and status on the global stage, and strengthening communities and livelihoods around the world.
When U.S. foreign assistance is used efficiently, it can have a great impact in advancing U.S. national security and economic interests. In fact, it can even make a profit for U.S. taxpayers. For instance, in fiscal year 2023, DFC’s revenue exceeded costs by $341 million.
The DFC is approaching the end of its seven-year authorization in October of this year. While DFC’s current lending cap stands at $60 billion, double that of OPIC, it has already lent more than $49 billion. If the current deal flow in the pipeline continues at this rate, the DFC will reach its lending cap before October, making reauthorization urgent.
Our subcommittee has the unique opportunity to shape and reauthorize the DFC with much-needed reforms to ensure it remains agile, effective, and aligned with America’s national security priorities.
The Biden administration had an ambiguous definition of “national security” and thus pushed through projects that advanced the administration’s diversity and green agenda.
Furthermore, we know that the DFC was unable to fully utilize its equity investment tool and was prohibited from operating in countries that would be particularly useful to advancing U.S. national security. These are just some of the evident issues that must be addressed in the reauthorization this year.
Today’s hearing will explore several important questions:
- How can the DFC better address emerging threats and opportunities, such as energy security and supply chain resilience?
- What reforms or additional authorities are needed to enhance the DFC’s ability to compete with the Chinese Communist Party’s Belt and Road Initiative?
- How can we ensure that the DFC’s operations remain transparent, accountable, and targeted to deliver measurable outcomes for our partners abroad and American taxpayers?
We must ensure that the DFC is equipped to face 21st-century challenges with cutting-edge approaches. The modernization and reauthorization process offers an opportune moment to amend the DFC’s mandate to expand its flexibility and financial toolkit.
With that, we have a distinguished panel of witnesses before us today, whose insights will inform the reauthorization process. Their testimony will help us assess DFC’s progress, identify gaps and areas for improvement, and chart a path forward to ensure this institution remains a cornerstone of U.S. global leadership.
