DFC visits Eastern Europe, highlights swift response to war in Ukraine
This week DFC CEO Scott Nathan traveled to Eastern Europe and announced multiple investments to provide immediate support to Ukrainian families and businesses that have been displaced by the war. These latest investments build on a long U.S. history of mobilizing investment in the region, and make use of some of DFC’s newest investment tools.
“It’s important that Ukrainian businesses have the ability to survive the war so that when the war is over, they can go back and help rebuild the economy,” Nathan said shortly after landing in Georgia, where he announced technical assistance to support some Ukrainian small and medium businesses (SMEs) that have been displaced so that they can maintain continuity in new markets in Georgia and throughout the South Caucasus region. DFC will work with the Dutch development agency FMO to provide a grant to Gazelle Finance to support some of these businesses that have temporarily relocated to neighboring countries.
In a separate technical assistance facility, DFC will provide a grant to American Hospital Tbilisi to help the hospital provide outpatient care and surgical services to Ukrainian citizens who have been temporarily displaced by the war. There are an estimated 28,000 Ukrainian refugees in Georgia.
Both these technical assistance facilities extend partnerships with existing DFC clients. DFC first partnered with the Gazelle Fund in 2016, with financing to support investments in commercially viable SMEs. The American Hospital Tbilisi is a state-of-the art hospital that was built with the support of DFC financing and opened last year.
DFC, together with its predecessor agency the Overseas Private Investment Corporation (OPIC), has a long history of mobilizing investment in Eastern Europe to help rebuild neglected infrastructure, modernize industry, and support small businesses following the fall of Communism. One example of that work stands in the center of Tbilisi, where the Tbilisi Marriott, which was gutted during the country’s 1991 civil war, was rebuilt with OPIC financing in 2000. The hotel is located just around the corner from Freedom Square, which was renamed after Georgia gained independence, and hosts tourists and business travelers from around the world.
In providing technical assistance grants to support displaced families and businesses, DFC is using a new authority granted under the BUILD Act, which created the U.S. International Development Finance Corporation in 2019 as an expanded and modernized development agency with additional resources, tools, and flexibilities to advance development and address emerging challenges.
While technical assistance grants are typically smaller than DFC financing, they can be highly effective in expanding the development impact of an existing project, in these cases, by enabling them to better serve individuals and businesses impacted by the war.
The technical assistance announcements in Georgia followed a visit to Latvia, where DFC and the Three Seas Initiative Investment Fund announced a term sheet that will form the framework of an agreement for DFC to provide up to $300 million of financing to the fund to support investments in energy and infrastructure to help enhance energy security and diversification in response to the war.