DFC Modernization Act of 2025

This bill, the DFC Modernization Act of 2025, updates and renews the law that governs the U.S. International Development Finance Corporation (DFC). It pushes DFC to mobilize more private investment to advance U.S. foreign policy, development, and national security goals. It encourages DFC to take on more risk—using tools like equity and partial guarantees, investing in tougher places, helping allies diversify energy, and countering strategic rivals. It also limits DFC work in high‑income countries unless the President certifies it serves U.S. interests.

Key points

• Who is affected: DFC; companies and projects seeking DFC support; allied and partner countries; and projects that involve state‑owned enterprises.
• Creates a revolving Equity Investments Account so DFC can reinvest earnings and fees from equity deals.
• Lets DFC use part of its fees to upgrade IT systems, cover project‑specific costs, and move funds between internal accounts.
• Sets DFC’s total risk cap at $50 billion.
• Tightens rules: DFC must set policies for work with state‑owned enterprises; it cannot back projects tied to governments or state‑owned firms from “countries of concern,” or private firms using anticompetitive practices.
• Updates leadership: adjusts the Board (including naming a Vice Chair), clarifies the Chief Risk Officer role, and directs the CEO to build private‑sector partnerships, including small, high‑impact projects in very poor or fragile places.
• Adjusts coordination with other development agencies and information sources, and repeals a 2019 European energy security law now deemed redundant.
• When: Extends DFC’s authorities through December 31, 2031.