WASHINGTON U.S. International Development Finance Corporation (DFC) today launched Portfolio for Impact and Innovation (PI2)�an initiative that expands support for early-stage social enterprises with innovative solutions to challenges facing the developing world. The initiative will leverage DFC’s enhanced resources, tools, and flexibility to multiply existing efforts to finance these early innovators.
U.S. International Development Finance Corporation is first and foremost a development organization, said DFC Chief Executive Officer Adam Boehler. “PI2�which will help bridge the financing gap for growth-stage businesses that promise transformative impact but lack access to capital�will redouble our support for exactly the types of projects envisioned by Congress when it passed the BUILD Act and placed development impact at the very heart of our mission. With dual goals of financing highly developmental projects and serving as an engine for innovation, PI2 will enable DFC to more proactively and effectively address global development needs.
Small, early-stage businesses are forging some of the most creative and impactful solutions to challenges facing the developing world today. Yet these same businesses often face the steepest hurdles to accessing financing needed to scale their innovative approaches, said DFC Chief Development Officer Andrew Herscowitz. Through PI2, DFC will open up new opportunities for enterprises which, with just a little bit of support, can deliver outsized impact.
Early-stage social enterprises face challenges accessing financing due to their relative size, short track record, and novel approaches. However, the deeply developmental impact they can have makes these investments extremely attractive. PI2 aims to address the financing shortfall by utilizing DFC’s enhanced toolkit to finance these ventures and deliver life-changing goods and services to those most in need.
PI2 builds on the success of Portfolio for Impact (PI), an initiative launched in 2014 by the Overseas Private Investment Corporation (OPIC) before its transformation to DFC. Last year, PI surpassed $100 million in commitments to early-stage social enterprises that are empowering smallholder farmers, supporting low-income students, and introducing clean cook stoves.
PI2 will continue the mission of PI but multiply its reach and impact, including by:
Scaling with DFC’s total portfolio with the potential to grow up to $900 million
Doubling maximum financing eligible to applicants from $5 million to $10 million per project
Offering applicants the full suite of DFC tools, which includes equity and debt financing, political risk insurance, and technical development
Creating an innovation lab experience within DFC to serve as a hub and resource for fostering innovation and incubating leading-edge ideas
Placing an enhanced focus on bolstering women’s economic empowerment through DFC’s 2X Women’s Initiative and co-investment partnerships
Collaborating closely with U.S. Government counterparts in order to more proactively identify and support early innovators
DFC is a new U.S. Government agency created by the Better Utilization of Investments Leading to Development (BUILD) Act. The agency modernized OPIC with a more than doubled investment cap of $60 billion and new financial tools to invest in highly developmental projects that transform lives across the developing world. By providing targeted financing for social impact with a focus on innovation, PI2 will enable DFC to multiply its impact in underserved communities and deliver on the agency’s enhanced development mandate.
Source: U.S. International Development Finance Corporation