Unlocking investment in the Indo-Pacific
Stretching from the west coast of the United States to the west coast of India, the Indo-Pacific is home to more than half of the world’s population and nearly two-thirds of the world’s economy. The region supports more than three million American jobs and sources nearly $900 billion in foreign direct investment in the U.S. In May 2022, the Biden Administration launched the Indo-Pacific Economic Framework for Prosperity (IPEF) as a new model of economic engagement in the region that emphasizes how investment in the Indo-Pacific can bolster innovation — in supply chain resiliency, climate adaptation, e-commerce, and other global challenges — and bring benefits to partners on both sides of the Pacific.
In Fiscal Year 2022, U.S. International Finance Development Corporation (DFC) transactions in the Indo-Pacific totaled more than $2 billion, a 50 percent increase from 2021 that brings the agency’s total active commitments in the region to more than $6.6 billion. DFC financing catalyzes private capital in the region and provides host countries with transparent, high-standard alternatives to authoritarian government support.
$200 million loan to SeABank advances DFC’s commitment to the Indo-Pacific
DFC recently disbursed the first tranche of a $200 million loan to Southeast Asia Commercial Joint Stock Bank (SeABank), a publicly-traded commercial bank in Vietnam. DFC financing will help SeABank expand lending to entrepreneurs, small- and medium-sized enterprises (SMEs), climate finance-related projects, and businesses that advance the 2X Women’s Initiative through female leadership or providing a product or service that empowers women.
The SeABank loan is the largest DFC transaction in Vietnam to date and comes as the country is working to strengthen climate-resilient economic growth. During a signing ceremony for the disbursement, DFC Chief Operating Officer Agnes Dasewicz spoke of the tremendous investment opportunities in Vietnam and the broad impact that this project will have on the Vietnamese economy.
“This loan will help Vietnam’s businesses regain some of the momentum that was lost during the COVID-19 pandemic. It will reach some of the borrowers, including entrepreneurs and women-owned businesses, that are most in need of working capital,” Dasewicz said.
Additional Exemplar Projects
DFC has active commitments in 16 countries in the Indo-Pacific. Projects focus on expanding access to healthcare, electricity, clean water, and financial services and helping to strengthen agriculture supply chains and infrastructure.
For example, a $75 million equity investment will help Quadria Capital Fund III lend to businesses in the region’s healthcare value chain. DFC’s financing will support hospitals and other treatment facilities, medical laboratories, and manufacturers of medical devices and equipment to improve the availability and affordability of healthcare across the region.
A DFC loan guaranty will help expand access to affordable telecommunications in Papua New Guinea and other Pacific markets. DFC and Japan Bank for International Cooperation (JBIC) will each provide $50 million to guarantee financing by Export Finance Australia (EFA) for Telstra’s acquisition of Digicel Pacific’s telecom assets. The project supports the continued provision of affordable, high-quality mobile voice and data services to subscribers in these markets.
DFC engagement in the Indo-Pacific is also supporting American businesses. A DFC loan of up to $500 million will help First Solar, the largest U.S. solar module manufacturer, develop a new manufacturing facility in India. The new facility will leverage innovative cadmium telluride thin film technology to produce modules responsibly and reliably, strengthening the solar supply chain at a time when much of the world is looking for ways to expedite the green energy transition.
These transactions are helping to close the investment gap in the Indo-Pacific, providing growth and stability to local economies and communities, while also bringing substantial benefits to the region’s international partners.