How the United States is Confronting COVID-19 with Development Financing
5 min readJun 2, 2020

By, Andrew Herscowitz, Chief Development Officer, U.S. International Development Finance Corporation

Six months ago, when the U.S. International Development Finance Corporation (DFC) launched, few could have predicted how soon this new government agency would be called upon to help save lives, preserve communities, and support economic growth. Today DFC is at the forefront of mitigating the impact of the COVID-19 pandemic abroad and laying the groundwork for a more prosperous future.

DFC is America’s development bank, helping the private sector invest in developing countries to lift people, communities, and entire countries out of poverty. DFC’s investments deliver clean water, sanitation, and healthcare; provide loans to small businesses and women entrepreneurs; and build critical infrastructure like power plants, airports, and telecommunications networks. These needs were pressing before the pandemic, and today our support is all the more urgent.

DFC is addressing this unprecedented crisis by:

  • Prioritizing health-related investments to strengthen health systems so they are better equipped to respond to the pandemic
  • Providing loans to help businesses, industries, and economies survive economic shocks
  • Building critical infrastructure projects in water, sanitation, and power
  • Supporting farmers so that critical food supply chains remain strong
  • Partnering with allies to amplify our impact

Investing in a Pandemic

The pandemic has strained DFC’s partners with scores of our active projects reporting negative growth. DFC, by design, works in challenging environments and under challenging circumstances, which is why we provide “patient” capital. We are prioritizing the well-being of our clients, their employees, and their projects by actively identifying financial solutions to help them weather this storm. DFC’s 25-year loan product, for example, can sustain current partners and provide opportunities for new clients to enter the markets where their investments are needed most. And in May, DFC approved a new rapid response liquidity facility providing up to $4 billion in additional financing for existing projects that are facing challenges as a result of the pandemic. This facility will help ensure that these projects can continue to operate and deliver their intended development outcomes.

DFC has 30 COVID-19-related projects worth a total of more than $1 billion in our deal pipeline. Many of these projects will bridge an urgent healthcare gap or provide loans to struggling businesses. A recently committed loan to a medical technology company, for example, will deliver life-saving equipment to hospitals in Africa. We are ever mindful that investments in developing countries are complex and difficult to achieve. That was the case before the pandemic, and it will continue to be for the foreseeable future. This is why institutions like DFC must step forward.

We are also focused on the long-term, with projects that promote clean water, sanitation, and food security. These are the most basic building blocks of healthy communities, and by investing in developing countries, we will be better prepared for future health crises.

Acting alone, governments lack the resources required to solve the problems that developing countries face. Private investors often need support investing in challenging frontier markets. Development finance institutions (DFIs) like DFC help bridge the gap between what government and the private sector can do. In doing so, we can provide an economic lifeline to developing countries, that is more important now than ever.

To meet this challenge, DFC just launched a new Health and Prosperity Initiative and issued a call for proposals from private businesses seeking DFC support, with plans to finance up to $2 billion for health projects in developing countries. DFC expects this $2 billion commitment will catalyze an additional$3 billion from private sources of capital.

The private capital markets that are convulsing as a result of COVID-19 are the very same markets that will help the world emerge from this crisis. DFC is working closely with banks and investors to ensure that financing will not be an obstacle, but rather the means for rapid, tailored solutions. A single $20 million DFI equity investment into an investment fund, for example, can help de-risk the investment and catalyze more than $1 billion of private capital in a developing market.

Beyond addressing urgent healthcare and financing needs, there is another significant need that easily could be overlooked: healthcare infrastructure. Without a reliable source of electricity, how will medications be refrigerated? How will examination rooms be lit? How will life-saving machines, like ventilators, be powered? These are gaps that require real working capital. DFC is working to identify innovative financing vehicles for companies to produce tailored power solutions for small health clinics, with a focus on inexpensive renewable energy.

DFC investments will strengthen large industries, as well as individual households through support of microfinance institutions that lend to people at the base of the economic pyramid. Even a $200 microfinance loan can help sustain the family of a farmer, who has fallen ill or whose supply chain has been interrupted because of COVID-19 disruptions. For example, DFC is looking to provide millions of dollars of financing for agricultural businesses in 20 developing countries, which will keep farming families economically afloat, but will also make sure that agricultural products are available in the U.S.

We are mindful that women tend to be disproportionately impacted by crises, especially when they seek to access capital. DFC also continues to apply a gender lens to its investments, prioritizing projects that empower and lift up women through our 2X Women’s Initiative.

Looking Forward

DFC’s COVID-19 response efforts will not end with the immediate response. Rather, the pandemic’s impact is transforming the world as we know it and will be felt for years. DFC was created as a modernized development institution equipped with the tools and the resources necessary to address the greatest challenges facing the world. Data from our clients show that our current portfolio has provided 100 billion liters of clean water, empowered 310,000 smallholder farmers, and supported one million patient visits to healthcare facilities. We are viewing our development work through a COVID-19 lens now, focused on promoting a healthier, more resilient, and economically empowered world for years to come.



U.S. International Development Finance Corporation. Investing in development and advancing U.S. foreign policy. Twitter: @DFCgov