H.R. 5299 — DFC Modernization Act of 2025

This section amends the definitions applicable to the U.S. International Development Finance Corporation (DFC) (22 U.S.C. 9601) by (1) adding a definition of "high-income country" as a country with a high-income economy, as defined by the World Bank; (2) expanding the definition of "qualifying sovereign entity" to include any other similar institution with a purpose similar to that of the DFC as described in section 1412(b); and (3) adding a definition of "country of concern" that includes the Bolivarian Republic of Venezuela, the Republic of Cuba, the Democratic People's Republic of Korea, the Islamic Republic of Iran, the People's Republic of China, the Russian Federation, and Belarus.

This section revises the country focus requirements for the United States International Development Finance Corporation (DFC)—which mobilizes private sector capital for development projects abroad—by (1) inserting ", and high-income countries and areas, as appropriate," after "less developed countries" in the DFC's purpose statement, and (2) restricting DFC support under title II in high-income countries and areas unless the President certifies to the appropriate congressional committees that such support furthers U.S. national economic or foreign policy interests. (Thus, high-income country support requires only presidential certification, unlike upper-middle-income country support, which also requires significant developmental outcomes or benefits to the poorest population.)

This section modifies the Board of Directors of the U.S. International Development Finance Corporation (DFC)—which oversees the agency's financing for private-sector development projects in lower-income countries—as follows: (1) reduces from at least five to at least three the minimum number of individuals on lists submitted by the Senate majority leader, Senate minority leader, House Speaker, and House minority leader from which the President must appoint four Board members; (2) replaces one specified ex officio officer with one other principal officer from an executive department designated by the President; and (3) requires the President to appoint a Board member as Vice Chairperson.

This section modifies the Chief Risk Officer position within the U.S. International Development Finance Corporation (DFC)—which finances private-sector development projects abroad—as follows: (1) strikes the introductory phrase ", who—" preceding paragraph (1) and inserts a period; (2) strikes subparagraphs (A) and (B) of paragraph (1); and (3) in paragraph (2), strikes "audit" and inserts "risk".

This section eliminates the Chief Development Officer position from the U.S. International Development Finance Corporation (DFC)—which finances private-sector projects in developing countries to advance U.S. foreign policy objectives—and vests authority to appoint officers, employees, and agents in the Chief Executive Officer (CEO) (replacing prior authority shared with the Chief Development Officer). It further (1) revises the CEO's core duties to developing private-sector relationships at the nexus of business and development, reducing business risks through transaction support and partnerships, mobilizing private finance at scale, and pursuing developmental projects of all sizes including in extremely poor or fragile countries (replacing previous duties); and (2) eliminates the requirement for the CEO to coordinate with the U.S. Agency for International Development.

This section increases the number of administratively determined positions authorized for the U.S. International Development Finance Corporation (DFC) to 100 (from 50).

This section establishes in the Treasury the Equity Investments Account of the United States International Development Finance Corporation (DFC) within the agency's equity investment authority and provides that earnings, fees, credits, and other collections from equity investments made using account funds shall be deposited into and available from the account without further appropriation or fiscal year limitation. (As background, the DFC equity investment authority enables minority investments in projects to mobilize private capital for U.S. foreign policy and development objectives in lower-income countries.) It also amends DFC's general collections provision to exclude such equity investment collections from the Equity Investments Account. (Thus, these collections are retained in the dedicated revolving account rather than treated under general DFC collections rules.)

This section eliminates references to the U.S. Agency for International Development (USAID) from the enterprise funds provision governing the U.S. International Development Finance Corporation (DFC). Specifically, (1) it strikes "the Administrator of the United States Agency for International Development" from paragraph (1); and (2) strikes "Agency for International Development" from paragraph (3)(E). (Enterprise funds are privately managed investment vehicles established by DFC to mobilize private capital for development projects in lower-income countries.)

This section extends the termination date for authorities provided under the subchapter establishing the U.S. International Development Finance Corporation (DFC)—which mobilizes and facilitates private sector investment in developing countries through loans, loan guarantees, insurance, and technical assistance—to December 31, 2031 (from October 5, 2025).

This section modifies the general powers of the U.S. International Development Finance Corporation (DFC)—which provides financing for private-sector development projects in lower-income countries—by (1) authorizing contracts, grants, and other agreements notwithstanding title 41 (from division C of subtitle I of title 41); and (2) removing the prior expiration, tied to the end of a lease in effect before October 5, 2018, for the requirement limiting obligations on office space leases to the current fiscal year for which payments are due.

This section revises authorized uses of the Corporate Capital Account of the U.S. International Development Finance Corporation (DFC)—which funds the agency's loan, loan guarantee, insurance, and reinsurance programs—by (1) striking project-specific transaction costs from expenditures subject to annual appropriations under subsection (d)(1) and adding them as a permissible use of non-appropriated account income and revenue under subsection (d)(2), (2) authorizing transfers from the account to other Corporation-established accounts, funds, or reserves in amounts determined by the Board under subsection (d)(2)(E), (3) specifying that funds authorized to be appropriated to carry out title 10, United States Code; the Strategic and Critical Materials Stock Piling Act (50 U.S.C. 98 et seq.); or other listed authorities are ineligible for transfer to the Corporation under subsection (j), and (4) expanding the definition of project-specific transaction costs under subsection (k) to explicitly include, after legal expenses, other direct costs associated with origination or monitoring services (e.g., seminars, conferences, pre-investment services) and to revise paragraph (k)(2) by changing "does not include" to "includes." (Thus, the Corporation gains flexibility to cover transaction costs and establish reserves using fees and other non-appropriated revenues without reliance on annual appropriations.)

This section strikes from law (1) the United States Agency for International Development from a sense-of-Congress statement directing the U.S. International Development Finance Corporation (DFC) to use data from specified agencies, including the Department of State and Millennium Challenge Corporation (MCC), to inform its support decisions under subchapter II of the BUILD Act (i.e., DFC development financing programs); and (2) MCC's Constraints Analysis from a list of sources of information, leaving only the Department of Commerce's Country Commercial Guides.

This section establishes policies and prohibitions on U.S. International Development Finance Corporation (DFC) support under title II for projects involving state-owned enterprises, sovereign wealth funds, parastatal entities, anticompetitive practices, and countries of concern. Specifically, it (1) requires DFC to develop policies and guidelines ensuring competitive neutrality for such support; (2) prohibits support for projects involving private sector entities engaged in anticompetitive practices or partnerships with—or operation, management, or control by—the government or a state-owned enterprise of a country of concern; (3) defines "state-owned enterprise," "control," and "owned"; and (4) deems compliant entities as "qualifying sovereign entities" under section 1402. (Thus, these restrictions limit DFC financing—such as loans, equity investments, and political risk insurance primarily for U.S. firms in developing countries—to promote private sector competition and U.S. national security interests.)