ImpactAlpha, May 27 – Multilateral banks and development finance institutions are an especially critical source of capital in emerging markets as private investors shy from dealmaking in the pandemic.
The U.S. International Development Finance Corp.’s new $4 billion relief pledge joins multi-billion-dollar relief efforts from the International Finance Corp., the Inter-American Development Bank and the African Development Bank (see, “How development finance leaders can help emerging-market economies survive the COVID-19 crisis”).
The DFC’s $4 billion Rapid Response Liquidity Facility will target existing DFC projects that “have been particularly impacted by the challenges of the COVID-19 global pandemic,” the agency said.
The facility is in addition to an earlier $2 billion initiative to strengthen the COVID health response in emerging markets.
Approval of the new facility follows the DFC’s new mandate from the White House to back domestic production of vaccines, personal protective equipment and other COVID-related products (see, “White House stands up an impact investing arm to finance COVID-response suppliers”).
“Our development mission is more important than ever in the face of COVID-19,” said the DFC’s Adam Boehler.
The DFC has already re-upped investments in India-based education lender Varthana and impact lender Caspian Debt, and Kenya-based Twiga Foods, among others.
In March, it expanded the investment tools and ticket sizes for its small business-focused Portfolio for Impact.