FOR IMMEDIATE RELEASE
The Modernizing Foreign Assistance Network (MFAN) applauds Congress for passing bipartisan legislation to reauthorize and strengthen the U.S. International Development Finance Corporation (DFC). The six-year “DFC Modernization and Reauthorization Act of 2025” was included as part of the National Defense Authorization Act for fiscal year 2026, which passed Congress this week. This legislation comes at a time of uncertainty around U.S. engagement on international development and affirms the bipartisan backing of development finance as a tool for advancing U.S. international development and foreign policy objectives.
MFAN commends several aspects of the legislation, including:
● Retained Development Mandate: The bill largely preserves the DFC’s core development focus, ensuring that poverty reduction and inclusive growth remain central to its mission.
● Expanded Capacity: By significantly increasing the maximum contingent liability and equity fund, the legislation enhances the agency’s ability to mobilize private capital for impactful projects.
● Transparency Improvements: The bill includes several meaningful steps toward greater accountability, including strengthened use of evaluations, new requirements for the publication of private capital mobilization data, a call for the publication of development impact/performance metrics (both estimated and achieved), and specifications for the creation and use of theImpact Quotient.
● Balanced Approach to High-Income Countries: The bill caps both the amount the agency can finance in high-income countries and the share of total project costs in those markets, reinforcing the priority of investments in developing economies.
● Congressional Oversight Threshold: Raising the threshold for congressional notification of projects from $10 million to $20 million is a positive step forward in reducing burdensome reporting requirements.
● Prohibition on Domestic U.S. Investments: This “Sense of Congress” provision underscores that the DFC is not permitted to invest domestically in the United States.
MFAN also applauds the legislation’s reforms to strengthen and integrate the role of the Chief Development Officer (CDO). Under the new provisions, the CDO reports directly to the CEO, has expanded interagency coordination responsibilities, and is explicitly tasked with identifying projects that advance development interests, scaling evidence-based innovations, and serving as a liaison with federal departments. These changes reinforce the agency’s commitment to development impact.
While these are all positive steps, MFAN notes that there is still work to be done to ensure that the Administration prioritizes investments in poor countries where limited access to capital remains a significant barrier to economic growth. Of particular concern - the legislation allows certain investments in very wealthy countries in the energy, technology, and critical minerals sectors. Increased transparency into deal origination, structure, and impact will allow for more constructive oversight by Congress and outside stakeholders and will be essential to ensure that the spirit of this legislation is upheld.Additionally, Congress did not fully address certain bureaucratic roadblocks to speedy consideration of deals and other operational issues necessary for theDFC’s smooth operation.
“It’s encouraging to see Congress and the Administration come together on a largely bipartisan bill to reauthorize the DFC in a way that strengthens the agency’s capacity and preserves its commitment to development,” said Tod Preston, MFAN Executive Director. “As these expanded authorities take effect, it will be critical for Congress and other stakeholders to ensure that the limitations on investments in higher-income markets are upheld and that theDFC’s central mission—mobilizing private sector investment in poor, developing countries—remains front and center.”
“This bill includes several measures that will strengthen the agency’s work. At the same time, it’s important to ensure that additional consultation, reporting, and oversight requirements do not unintentionally slow deal processing. While well-intentioned, I’m concerned some of these new provisions will make the agency less nimble,” said MFAN member Rob Mosbacher, former President and CEO of the Overseas Private InvestmentCorporation and former Chair of the DFC’s Development Advisory Council.
About MFAN
The Modernizing Foreign Assistance Network (MFAN) is a bipartisan coalition of international development practitioners, policy advocates, and experts committed to making U.S. foreign assistance more effective, accountable, and results-driven.
For media inquiries, please reach out to Tod Preston, MFAN Executive Director, at Tod.Preston@modernizeaid.net
