A team of U.S Development Finance Corporation (DFC) were recently in Rwanda for a prospective mission to talk about healthcare investments, TOPAFRICANEWS has exclusively learnt.
This was revealed on Tuesday during a digital briefing on DFC investment in Africa.
The SPECIAL BRIEFING VIA TELEPHONE was attended by Adam Boehler, Chief Executive Officer of the Development Finance Corporation (DFC) and Executive Chairman of Prosper Africa and Worku Gachou, DFC Managing Director for Africa as well as Vibhuti Jain, DFC Regional Director for Africa.
The high-level officials were briefing representatives from African Media Houses among them is Mr. Ange de la Victoire DUSABEMUNGU who was representing TOP AFRICA NEWS media at the briefing.
While responding to TOPAFRICANEWS questions on Which investment opportunities that DFC has in Africa especially in Rwanda and Burundi, Adam Boehler, Chief Executive Officer of the Development Finance Corporation (DFC) and Executive Chairman of Prosper Africa revealed that DFC has got six existing projects in Rwanda and over $20 million invested there, and three projects in Burundi where about $12 million were invested.
Mr. Adam Boehler added “we are interested in other projects…. we were in Rwanda not too long ago really talking about healthcare investments. We were looking at genomic testing. We’ve been having a big push looking at genomic testing and the ability to drive, one, high-quality jobs and also great healthcare outcomes. So, we were in Rwanda talking about that recently, and I think we have interests in a lot more.”
“Earlier this year we traveled to the region with one of the world’s leading genomics testing companies, and the purpose of this trip was to explore a potential regional center, a regional location to establish a genomics testing facility. And as CEO Boehler said, the benefits of having this facility on the continent not only truly advances kind of precision healthcare, but also advances food security, agriculture with identifying crop strains that can be immune to certain drought or heat. And so, this is – this is really advanced technology that we think will be immensely beneficial for the African continent and really spur economic development and growth.” Also Mr. Worku Gachou, DFC Managing Director for Africa added as he Intervened on Rwanda and Burundi DFC related questions.
DFC is a $60 billion bank, the development bank of the United States, that invests to advance development in emerging countries. The Bank’s commitment to Africa is very significant. Historically it’s been over half of its investment has gone into the African continent.
As explained by Mr. Boehler, they have a very strong and longstanding commitment to the area, and DFC’s job really is to drive capital, to invest capital, empower a private market in Africa for sustainable solutions, to advance U.S. foreign policy.
“We are one of the only agencies in the country that returns capital to the American taxpayer. So those are the three things we look at in every investment we make.” He explains.
Our reporter also seeks to know if the U.S Government will not duplicate development works in Africa due to the existence of USAID Agency and Mr. Boehler responded the questions explaining that DFC and USAID are actually extremely complementary.
However, he noted that “on the USAID side, you’re thinking about grants, projects that are grant-funded; while DFC side being projects that are private-market funded, that have a return that are focused on sustainability.”
For more on the briefing, below is a transcript of the whole event
U.S. DEPARTMENT OF STATE
For Immediate Release July 14, 2020
Special Briefing via Telephone
Chief Executive Officer of the Development Finance Corporation (DFC) and Executive Chairman of Prosper Africa
And Worku Gachou
DFC Managing Director for Africa
And Vibhuti Jain
DFC Regional Director for Africa
July 14, 2020
The Africa Regional Media Hub
Moderator: Good afternoon to everyone from the U.S. Department of State’s Africa Regional Media Hub. I would like to welcome our participants from across the continent and thank all of you for taking part in this discussion. Today we are very pleased to be joined by Adam Boehler, Chief Executive Officer of the Development Finance Corporation and Executive Chairman of Prosper Africa. He is joined by the Development Finance Corporation’s Managing Director for Africa Worku Gachou, and the DFC’s Regional Director for Africa Vibhuti Jain.
Our speakers will discuss DFC’s recently approved investments in Africa and its various initiatives to mobilize private sector investment in support of global health resilience. They are joining us from Washington, D.C., and Johannesburg, South Africa.
We will begin today’s call with opening remarks from Adam Boehler, then we will turn to your questions. We will try to get to as many of them as we can during the time that we have.
As a reminder, today’s call is on the record. And with that, I will turn it over to CEO of DFC Adam Boehler.
Mr. Boehler: Thanks very much, Marissa, and I want to thank everybody for joining us. It’s a pleasure to be able to talk about our commitment to Africa. Let me start with a few high-level talking points and then kind of a commitment that we’re making for September.
First, I think for DFC – and let me remind you, DFC is a $60 billion bank, the development bank of the United States, that invests to advance development in emerging countries. Our commitment to Africa is very significant. Historically it’s been over half of our investment has gone into the African continent. So we have a very strong and longstanding commitment to the area, and our job really is to drive capital, to invest capital, empower a private market in Africa for sustainable solutions, to advance U.S. foreign policy, and we are one of the only agencies in the country that returns capital to the American taxpayer. So those are the three things we look at in every investment we make.
We’ve been quite aggressive over the last few months during COVID. Our view is that DFC is needed much more than ever in investing in – during COVID. And what we did right away, and I think similar to PPP in the United States, we’ve recognized that not every developing country can announce a liquidity program like PPP. And so us, and we’ve done this with other DFI colleagues like IFC and others, have tried to provide a liquidity facility very quickly. And so we immediately put out for our existing investments a $4 billion liquidity facility, and that is basically to provide liquidity for those months when countries are hardest-hit by COVID. We know how important that has been and is in the United States, and so we wanted to work with developing countries on the same, which is the quickest thing we can do is to ensure there’s liquidity so people don’t have to lay people off or go out of business.
The second thing we’ve done is we announced a heavy Health and Prosperity Initiative, and there, that’s DFC investing $2 billion ourselves with private capital, so that’s a $5 billion total commitment with private capital. And one of the reasons we focused on health and prosperity is because, in a similar way to how on the African continent we’ve been able to skip the step of fixed-line phones and move quickly to cell phones because there wasn’t fixed-line infrastructure, our thought on the healthcare side is if you look at the United States or other developed countries, in the ‘70s and ‘80s we invested in a lot of heavy infrastructure, a lot of heavy hospital infrastructure, and sometimes that’s weighed us down. And if you look at novel approaches in healthcare today, I think about telemedicine, home-based medicine, digital healthcare. These are technologies that we think will be particularly interesting in Africa because Africa is not weighed down the same way developing [sic] countries are with fixed investments in infrastructure.
So we think there’s a possibility to skip a step and go right to what is state-of-the-art on the African continent. And so a huge portion of our Health and Prosperity Initiative is going to be focused on Africa and what we can do there.
Finally, we’ve had a huge commitment to 2X. We recognize – and 2X is our women’s investments initiative. We recognize that women are disproportionately affected by the COVID crisis. You have a lot of people that were working that are unable to work because their kids are home because of COVID, and so we’re interested in investing further in women, in technologies like coding at home and other things that can be done in a home-based way so that women can be empowered during this. So we’ve really doubled down on our 2X initiative. The United States has been a leader in this area. We actually made a goal for us and our other partner investment entities in other countries – we partner a lot with the UK CDC, with the Canadians, with the Germans, with a number of others in our 2X initiative and our collaborative group exceeded our goal. We did four and a half billion dollars in investment. So it’s time to make a new goal. At the time, actually, we weren’t – our goal was 3 billion. We were not low-balling. We thought it was a really lofty goal. But we did better, so I think you’ll see a new goal come out from all the DFIs, but it’s – it’s not going to be 5 billion; we’re going higher and we’re really going to focus on 2X here as an extremely important area.
The other thing that we did, and not too distant, is I know a lot of you are aware of our whole-of-government approach in Prosper Africa, of which I was named chairman. And we’ve had a very significant focus on Prosper, and one thing I’d like to announce that we are doing is we are looking at convening an investment summit as well as meetings at the White House and a women’s focus summit in Africa with African countries’ heads of state in September. So you’re going to see our Ambassador Lana Marks is going to talk to the president of South Africa about this to organize, but COVID-dependent to some extent. We want to make sure everybody can do it safe. But we’ll be setting up safety there, but we’d love to invite a number of African heads of state to the United States to focus on an investment summit, and that will represent the United States commitment to the region – we think it’s critical – and our investment commitment. So we expect a lot of deals to be done there, a lot of potential investments. We’ll have some of the multilateral DFIs with us. We’re also going to talk at dinner at the White House, and then the next morning we’ll be talking 2X with Ivanka Trump’s team and really how we can focus on women in the region. So that will be coming up, COVID-dependent, we hope in September.
Let me turn it now to Worku and Vib to talk about some of the details of our commitment and focus and portfolio in Africa.
Mr. Gachou: Thank you, Adam. Hello, everyone. I’m Worku Gachou. I’m the managing director for Africa at the DFC, based in Washington. As Adam said, the agency is quite committed to the continent and looking forward with the DFC and our new agency and our new tools to really double down. And one of the commitments that we made to the continent is establishing our new African investment advisor program.
We are – through this program we will have a number of staff located throughout the region – based in East Africa, West Africa, Southern Africa, and the Horn of Africa – that should greatly help us increase our pipeline of transactions and activities, and then allow us and support our D.C.-based colleagues in project due diligence and monitoring of projects after commitment. Those two efforts will be quite important in the light of certain travel restrictions because of COVID. And so through this program we are excited that it will – we are doubling down on our commitment on the continent, but then also furthering our partnership and collaborations with our U.S. embassies and USAID missions on the continent.
That’s – that’s it from my end.
Ms. Jain: Thank you. Thank you, Worku. I’m just going to briefly introduce myself and say we’re really excited to have a team on the continent. We’re committed to being more accessible to potential clients, to growing our base of clients and really using all of our expanded authorities as DFC on the continent, and we really look forward to engaging with many stakeholders in the near future.
Moderator: Excellent, thank you. Thank you, Mr. Boehler, and to your team. We will now begin the question and answer portion of today’s call. For those asking questions, please indicate if you would like to ask a question and then type in your name, location, and affiliation. We ask that you limit yourself to one question related to the topic of today’s briefing: the Development Finance Corporation’s investments in Africa and global health resilience.
With that, our first question will be from Dusabemungu of Ange de la Victoire, Top Africa News. The question is: “I would like to learn more about the relationship between DFC and USAID. It looks like DFC is a new model of U.S. financing.”
Okay, Mr. Boehler, you are muted.
Mr. Boehler: Sorry, I thought I already did it. That’s – so, a great question. I’ll take a crack at it and then, Vib and Worku, you can offer color commentary. The – because, Vib, you came from USAID if I – am I correct on that? Yeah, yeah, so you know a lot about it too.
The – so the way I would think about DFC and USAID, they’re actually extremely complementary and we work together all the time. And so on the USAID side, you’re thinking about grants, projects that are grant-funded; DFC side being projects that are private-market funded, that have a return,, that are focused on sustainability. And so the way we work together so closely is there are some projects we fund that are – you have things that come in. Right, we’ll be in a state in the continent and we’ll see a project that comes in to us or to USAID. Sometimes it’s very relevant for grant financing, and sometimes it’s relevant for investment, and sometimes it’s relevant for both where we’ll say, hey, look, we need to do a blended financing deal here together because at the beginning we’re going to need to have some grants to support it, then it can become sustainable for private market.
And so, we work closely. I always think of myself – while I lead DFC as leading – or focus on what is the government’s focus and commitment, and how do we achieve that and how do we use those tools? So, I find AID not only a hugely important partner but a hugely important aspect of what the U.S. Government does and represents our commitment to the region.
Guys, other things you’d add?
Mr. Gachou: The only thing that I’d add on that is that USAID has unmatched expertise in development and then also monitoring and evaluation. And so what we are excited to do is actually leverage their field presence and on-the-ground presence, not only in Africa but throughout the world, and utilizing the missions to help advance our projects and our transactions in the markets which we both care deeply about.
Moderator: Thank you. Next we will – oh, Vibhuti, would you like to add to that? Okay. The next question —
Ms. Jain: I was just going to —
Moderator: Please, go ahead.
Ms. Jain: I was just going to say one exciting thing about DFC is that we also combined one of the past units within USAID, the Development Credit Authority, with OPIC to form DFC, and so we really do have a lot of commitment at the staff level – I also came from USAID – to closer collaboration. Thank you.
Moderator: Excellent, thank you. Next question, we’ll go live to Mr. J.G. Mbugua. Mr. Mbugua, please ask your question.
Question: Okay, all right. Hi, can you hear me? All right, so —
Mr. Boehler: Yes.
Question: All right, so basically I represent a publication, online publication called the Government Business Review. We just basically look at government projects, policies, regulations, and stuff. So, my question would be for DFC, what is going to be the primary channel for your funding to the private sector? Is it going to be, say, PPP-based? Is it going to be through private equity? Are you going to deal with on-the-ground companies direct? So how is that going to be done? And probably second, will there be any payoffs to the U.S.-Kenya free trade deal from the DFC investment funds? Are we going to see more funding from DFC as the result of these ongoing free trade deal negotiations? Thank you.
Mr. Boehler: Sure. So, I think, J.G., on your first question it’s somewhat all of the above. We do a lot of PPP financing. We do invest in private equity and venture capital firms that invest in entrepreneurs. And we do direct deals that are projects that are private market-oriented that go direct to entrepreneurs in the field. And let me – and we can pull out some examples, but Worku, maybe you can cover in a moment a fund example: our FreshToHome investment, because that might be a good one on the equity side, and how we’ve done deals to empower women in Africa just as examples.
And before changing it to Worku or to Vib, let me give a quick answer on the U.S.-Kenya deal. Yes, those kind of deals in free trade mean that there is more private market interest, and so that does fuel investment, right. So at the end of the day, because we’re backing private market, you need to have the right circumstances by which to invest. And let me give a shout-out on the Ethiopia side, where recently we’d been working with the Ethiopian Government to say – one of the limiters to private capital investment in Ethiopia historically has been the ability to have dollars, offshore accounts, and currency risks. So those two things have stopped private capital from coming in despite the opportunity in Ethiopia. And so we worked very closely with IFC and the Ethiopian Government to say, hey, look, you can’t just totally open offshore accounts right away, but why don’t you focus on two industries that are important to you to start so that we can get private capital to flow. And they picked the energy sector and the technology sector, which are great sectors to start, and we worked very closely with them to look at how we address offshore accounts and currency in that area.
So what does that do? That decision by the Ethiopian Government means that they’ve created an environment where private capital can flow. So anything that creates an enabling environment. So that U.S.-Kenya deal, that creates an enabling environment where you’re going to see more capital flow. That’s very important. So ultimately, our private capital, what are they looking for? They’re generally looking for – they need things like offshore accounts because otherwise you can’t take money out of the country if you’ve made money, so that’s an issue. They’ll look for currency stability. But top, number one thing is kind of rule of law, transparent, and speed at which to do access. So to the extent we can partner to create enabling conditions or trade deals, then you’re going to see more flow of investment.
Let me turn to you, Worku and Vib, on examples.
Mr. Gachou: Sure, thanks. And then just to give some specific concrete examples, so as Adam said, we have our debt product, we have our equity product, we have our fund-to-fund product, and we have our insurance product. And so, we use those tools to advance our development mission and our foreign policy mission. And so, an example of a recent fund transaction is Afrinvest, which is a Tunis-based fund that’s investing all throughout sub-Saharan Africa where we’ve committed $30 million at a recent June board meeting. Afrinvest tends to invest in the technology, healthcare, and manufacturing sector, which are sectors that are quite, quite important for us.
A 2X deal that we recently supported is we gave a $100 million investment into Union Bank of Nigeria. Union Bank of Nigeria will on-lend to women-owned or women-benefiting enterprises in Nigeria. So, we tackle the development challenges with a range of tools that we have within our toolkit.
And just on your point about the Kenya free trade agreement, last week I actually participated in the political launch of the free trade negotiations with Ambassador Lighthizer, who is the U.S. Trade Representative at the White House, and the reason why the DFC was at the table was because one of the pillars of the FTA negotiations was trade and investment. And since we are the driver of that for the U.S. Government, our USTR colleagues and the Kenyans thought it was important that DFC was represented at the free trade negotiations.
Moderator: Excellent, thank you. The next question goes to Joel Assoko, deputy editor of finance for Jeune Afrique. The question is: “Will DFC invest in private sector health projects and firms in Africa? And have there already been such investments in Africa?” You may have just mentioned one with Tunis, but if you could expand on that question.
Mr. Boehler: Yeah, broadly, I mean, the new Health and Prosperity Initiative in aggregate is a $5 billion commitment to investment and healthcare. We’re very interested in investments in Africa that take healthcare to the next level. So again, digital medicine, telemedicine, home-based care. And so we issued a $5 billion call for deals in Africa as a major focus.
Worku or Vib?
Mr. Gachou: Yeah, no. Thanks, Adam. So, with the healthcare initiative – and what’s exciting: we’ve already really doubled down on our commitment. Actually, just last month we utilized our Prosper Africa platform to have all of our embassies and our consulates do a central survey of their respective regions and identify African companies that are active in the healthcare supply chain, from PPE manufacturers to therapeutics. And we collated that list and did an assessment of the 60 or so different companies for potential investment. And so out of that 60, we are now looking at a handful of direct support. And so through that effort you see how we’re taking a large kind of interagency approach to these – to these important problems on the continent.
Moderator: Thank you. Jeune Afrique with a second question. It’s: “Are co-investments with other development finance institutions possible?” And I think, Mr. Boehler, you mentioned this at the top, but if you have any specific examples, I think that’s what Jeune Afrique is looking for.
Mr. Boehler: Yeah, Worku, then I’ll turn to you on the specifics. I mean, we absolutely do partner with the African Development Bank, we partner with the Islamic Development Bank, and we work all the time with IFC in the region. So, yes is the quick answer, but I’ll turn to you guys for specifics.
Mr. Gachou: Yeah, no, we’ve – we’ve actually stepped up our partnership and cooperation with regional development financial institutions. Last November, actually, CEO Boehler and President Adesina of the African Development Bank signed an MOU for jointly mobilizing up to $5 billion of co-investments. And so, we are looking at a number of transactions under that MOU in the energy space, in the transportation space, and the infrastructure space. I think leveraging the DFIs and their local presence and their on-the-ground knowledge is just a great way for us to deploy more capital in the region.
Ms. Jain: And for some specific examples, I mean, of recent transactions: We have funded power projects in Senegal like Cap des Biches with IFC; we have funded transactions with the CDC in Ghana like the Amandi power project; and I think if you look at some of the private equity funds that we have recently announced we’re committing to, you’ll see that we are very keen to co-invest with likeminded development finance institutions.
Moderator: Excellent, thank you. Next we’ll go live to Pearl Matibe of Open Parliament, Zimbabwe. Pearl, over to you and your question.
Question: Yes, thank you very much. My question may seem broad but I am really looking for some specifics, and it – I would like you to address some gaps. I’m hearing a few gaps in information in the narrative, but I do appreciate all the information you’ve shared today. Of that number that you said, total number, CEO Boehler, that you said you’re putting into Africa – you mentioned Africa as an entire continent – how much of that is going specifically to, say, SADC countries? So maybe a dollar amount or maybe a percentage of the total amount. How much is going specifically to that region? And also, you did speak about the things that attract investment. Are you hearing anything from your investors about fragile countries where economies are extremely weakened, like Zimbabwe? And how – because there’s a hospital, for instance, in Zimbabwe managed by [inaudible] Zimbabwe, and that is by private people who have taken St. Anne’s hospital to try and invest in that, which is totally separate from the government.
But also, there’s another group: the diaspora. I don’t hear your investments attracting this pool of people in the diaspora to help with that. And I also noticed some gaps in your explanation regarding the White House, so if you can explain the steps. You said you are going to the White House, and I didn’t quite clearly understand what is the White House’s role in these next steps that you are taking. I appreciate also the women’s conference you talked about. Are you incorporating the women and peace agenda with Ambassador Currie into everything that you’re doing? Thank you very much. If you can explain some of those gaps, I’d really appreciate it.
Mr. Boehler: Sure, Pearl. That was a lot of questions. [Laughter.] I have to make sure I’m comprehensive. So, let me try to address them, and you can keep me honest and make sure that I am hitting them.
In terms of the SADC focus, we have had – and I don’t – I’m going to have to turn it to Worku and Vib, and they may or may not have the breakdown on kind of what goes to Southern Africa development versus others. I know that we’ve done a lot of investment in the SADC countries, and so I’ll turn it to them on specifics because I don’t have those at my fingertips.
And then in fragile states, it has – we have a specific fragile state strategy. And as you may know, there’s a whole bunch more risk to private companies doing deals in SADC states – or sorry, in fragile states, and so I think that really depends on the situation. But there is where we have been pretty active in backing folks. So if we look at what we could do in the Sahel, for example, or other areas, these are difficult areas and so there are certain times when you have no circumstance where you can support private investment, but there are certain times when we can come in and reinsure a deal or provide kind of U.S. assistance to ensure that deals can get done even in fragile states, which is part of our mission. So, we work closely with USAID on there to do that.
With respect to your question around the White House, what I was specifically mentioning is an event, an investment event where we plan to invite African heads of state to come to the United States to meet with us and to have kind of an investment-focused event with the heads of state, where we would do an event at the White House as well, and then have a 2X women’s event and W-GDP event. I think as you may know, Ivanka Trump has been very involved there. We work closely with Ivanka on our women’s issues as well, so we would have her and her team there as well. So that’s something that we’re planning for September, COVID-dependent, because I want to make sure that everybody can be there and be there safely. But that’s what I was referring to there from the perspective of an event at the White House, but also doing an investment event and women’s event, because we’d want to make sure that if folks are flying over they get massive exposure in what we’re doing.
Mr. Gachou: And then to that SADC question, you can – all of our projects, our active projects actually, you can find online or you can download our app on the Apple Store at DFC Portfolio. But just to – I did a quick kind of snapshot, right. So, for example, in South Africa currently we have $900 million of exposure; in Botswana we have $149 million of exposure; in Tanzania we have over $100 million of exposure. So, within SADC countries in particular, in back-of-the-napkin math, we have over $1.5 billion of active investments in that region.
Moderator: Wow, the DFC has an app. Game-changer. [Laughter.] That’s amazing.
Mr. Gachou: And it’s on the Google Play Store. Sorry.
Moderator: Excellent. Thank you. Thank you for sharing that, Worku.
Mr. Gachou: Of course.
Moderator: The next question goes to Mr. Kevin Kelley of Nation Media Group. All right, let’s put his question. Okay. It seems that the question is no longer on the screen. So, Mr. Kelley, are you on the call? Would you like to ask your question live?
Question: Hello, can you hear me?
Moderator: Yes, we can. Go ahead, Mr. Kelley.
Question: All right, great. Yes, sorry you can’t see the message as I typed it. So, it’s simply that the U.S. federal budget deficit is projected to reach $3.7 trillion this year. That’s like an incomprehensible sum of money. So given that and probably pressures to cut some spending, what makes you think that the DFC will get the resources it needs from Congress within the context of Africa not being high up on the U.S. political agenda? Okay, thanks.
Mr. Boehler: Sure. So just a couple thoughts on that. I actually answered you written, but I’ll answer in a broader context too. DFC, sort of as I mentioned in the beginning of the call, is one of the only agencies in the United States that reduces the deficit, that’s sustainable investment that reduces the deficit. And so, I hope that at times like these where you do have more of a deficit, in fact, our value proposition becomes that much stronger. And I think there are very few tools that really drive development in such a significant way while also reducing the deficit. So, I think as we’re out there in Congress, you bet we’re going to be out there explaining not only our development mission and our outcomes, but what it means from the perspective of the deficit. It’s rare you get – you’re able to accomplish both goals at once.
Moderator: Excellent, thank you. We are going to go back to Kenya and a question from Mr. James Mbugua of Business Today and Business Daily. [CORRECTION: Question from Mr. Dusabemungu, Top Africa News] He states that – please – “I learned that you’re financing solutions to the most critical challenges, and mostly during this time of pandemic. So which solutions is DFC offering specifically to Burundi and Rwanda during this time of pandemic?” And feel free to speak sort of broadly on what’s being offered during the pandemic and we can get specific answers later to the participant.
Mr. Boehler: Yeah, I – so just at a high level, I know that we’ve got six existing projects in Rwanda, over $20 million invested there, and three projects in Burundi, about $12 million invested there. I know we are interested in other projects. I believe – and Worku, correct me if I’m wrong – we were in Rwanda not too long ago really talking about healthcare investments. We were looking at genomic testing. We’ve been having a big push looking at genomic testing and the ability to drive, one, high-quality jobs and also great healthcare outcomes. So, we were in Rwanda talking about that recently, and I think we have interests in a lot more. So, let me turn it to you guys.
Mr. Gachou: Yeah, you’re correct. Earlier this year we traveled to the region with one of the world’s leading genomics testing companies, and the purpose of this trip was to explore a potential regional center, a regional location to establish a genomics testing facility. And as CEO Boehler said, the benefits of having this facility on the continent not only truly advances kind of precision healthcare, but also advances food security, agriculture with identifying crop strains that can be immune to certain drought or heat. And so, this is – this is really advanced technology that we think will be immensely beneficial for the African continent and really spur economic development and growth.
Moderator: Thank you. A question regarding DFC’s Impact Quotient,, DFC’s new tool to measure development impact: What happens if there’s a negative impact on development? How then will the impact quotient be affected?
Mr. Boehler: That’s a great question. So, the IQ score – let me just make sure; I’m not on mute, am I? No, okay. [Laughter.] Okay. The IQ score is actually – so the interesting thing about the IQ score is it is not meant to just be a moment in time, so it does track over time that investment and the development impact, which was a really important thing, I think, about how the score was developed. And so, the IQ score, if it’s not achieving its outcomes, it’s going to track that and it will adjust and show the deal as less developmental than we thought it would be. So, we do a lot of due diligence, as you may imagine, on the front end to ensure that everything we’re doing is going to have a positive developmental impact. Our mandate, it’s very important to us that we evaluate human capital impact. It’s very important to us that we evaluate environmental impact. And one of the things I think in the way Congress set up DFC, and a real differentiator of some other sources of capital, is that, one, we believe in sovereign countries and investing in sovereign countries, and one of the things when I go out in market and when I visit Africa, one of the most important things I think about U.S. foreign policy is that what we’ve learned over time is that free and competitive, transparent markets are the number one thing that make a country successful, and then make our relationship successful. It is not about undue influence in various countries. I think that’s important.
And so, we get a lot of questions all the time: Well, how do you compare to China? China is investing in Africa all the time. And my point is we’re not going to send 1,000 Americans over there to complete a project. We want to empower your local workforce. We’re not going to invest in any shoddy infrastructure. We’re not investing in debt traps. We are investing in you and your sovereignty as a country. It’s like – it’s why we want to do partnership deals, and that’s an important differentiator. It is not about undue American influence. People tried that; that’s called colonialism, and that didn’t work out so well. And so, I think China will learn that, but that is an important thing in terms of an American approach, is it’s not a new colonialism. It is about investing in a sovereign country and free, competitive, transparent markets. And so when we’re looking at development in any deal, we’re always tracking that over time because we want to ensure that we’re getting the right outcomes.
Moderator: Excellent. We’ll go live again to Kenya, to Mr. Mbugua. Mr. Mbugua, please ask your question.
Question: Hi, yeah. So yeah, I – mainly I wanted to mention, I mean, we’re getting really great answers from these panelists. Thank you very much for bringing them to us. Now, I wanted to ask: Where should private companies that wish to attract investments from the DFC or from private companies in the U.S. go to for information on how to go about these partnerships or how to go about seeking investment through the DFC? Is there a particular place they should go, a website, office? That’s my question.
Mr. Gachou: Adam, do you want me to take that?
Mr. Boehler: Yeah, go ahead, Worku.
Mr. Gachou: Sure. So online you can find at dfc.gov the range of products that we offer to ensure that our product offering aligns with what the potential client is seeking, and then for any Africa-specific investment proposal, we established an email address: Africa@dfc.gov, where you can send your investment proposal and our staff will review it for consideration. So that email address is Africa@dfc.gov.
Moderator: Excellent. That brings us full circle about Mr. Boehler’s role in Prosper Africa as well. So could we talk a little bit about the role that DFC plays in Prosper Africa and perhaps, Vibhuti, you can mention the Prosper Africa secretariat that’s going to be established in Johannesburg and open shortly, hopefully around September. But could you talk about DFC’s role in Prosper Africa?
Mr. Boehler: Yeah, sure. So, I’ll make some general comments and then, Vib, maybe you can talk. So Prosper Africa is a whole-of-government commitment to Africa, and I think that’s very important because as we were discussing before, DFC is one of the significant tools that we have, but we also have USTR to do trade deals; we have USAID; we have MCC, our Millennium Challenge Corporation that invests significantly in countries if they meet certain compacts; we have the Export-Import Bank, Ex-Im, to do financing. And so one of the questions we always get is there are so many different products that the United States may offer, it can be confusing, and so the prospect – the Prosper initiative is meant to represent the United States commitment to the region and all of our combined products together and how we can implement that.
Moderator: Ms. Jain, would you like add to – yes, thank you.
Ms. Jain: Yes, sure. So as you’d alluded to, Marissa, I think one of the things that we find particularly beneficial about our close coordination and partnership with Prosper, particularly for those of us who are out on the continent, is Prosper Africa has set up within each embassy and consulate deal teams that are essentially a microcosm of what CEO Boehler just mentioned, which is different representatives from different parts of the U.S. Government really looking at the full lifecycle of resources and instruments available by the U.S. Government to support that investment or that transaction. And DFC forms a critical part with – as the government’s development bank of many of those transactions, but I think putting us in the context of broader U.S. Government support allows us to support transactions, to be aware of contacts.
And also to close the loop on the Prosper Africa secretariat, I’m based here in Johannesburg and I’m very excited to be co-located in the consulate with an oncoming of Prosper Africa secretariat members with whom I’ll be closely coordinating on contacts, leads, sector reform, and market trends. Thanks.
Moderator: Thank you. I know we’ve had a lot of our participants have questions about these 16, 17 different agencies that comprise Prosper Africa, so thank you both for that very succinct response. We’re going to go live to – back to Pearl Matibe of Open Parliament in Zimbabwe. Pearl, ask your question.
Question: Yes, thank you. I just – thank you very much for bringing up China, but I just wanted to just clarify: Do those comments also apply to Russia? And are you seeing any competition, or where do you see yourself in terms of investments Russia might be making on – in sub-Saharan Africa? Thank you very much.
Mr. Boehler: Yeah. I mean, I think that in general, my comments were meant to mean any autocratic state, but I do think just given the overwhelming focus lately of China on Africa, it was mainly centered around China. And we’ve had a lot of concern, and a lot of the concern has been a few areas. I worry that China has greatly overextended itself. They put out $1.3 trillion in their Belt and Road Initiative, and when we look at the projects, oftentimes I don’t see sustainable projects. And when you don’t see sustainable projects out there, usually that means there’s a shortcut that’s taken, and that could be money that changes hands inappropriately; that could be investment in infrastructure that is cheaply built that then collapses. And I will tell you, we see that out there all the time.
And so if I were – being in the United States, if I told you I had $1.3 trillion of credit extended in bad projects, we wouldn’t be able to sustain that over time, and I’m two times the size. So, I worry about that with China and I worry about them bringing down developing countries with them. And so, I will say from a U.S. perspective, we have strengths and weaknesses. I won’t always promise you we’re the quickest and we’re the cheapest. That’s not our goal. Our goal is to be the best. And so when we’re out there investing, if we’re going to put our name on something, I can guarantee we will invest in quality infrastructure, and it is not about us taking over or unduly influencing a country. And I think that’s very important. It represents a very different situation.
So one of the questions in Africa that I get all the time is – or comments I get – this is the most common comment I get, is: “We didn’t want to take money from China or that autocratic or this state, but where were you?” And I think that’s a fair question, and the answer from a DFC and Prosper perspective is: Here we are. It took us a while. We have to catch up, but we’re going to move quickly to catch up.
Moderator: Well said. Thank you for that question and the response. As we slowly start to wrap up – and I just want to remind, I know we have some people on the French language line too, and so if there are any French language questions, or at least one, please let us know and I can see if we can have an opportunity to answer that.
Just to talk finally on health resilience and that initiative, how has COVID-19 impacted your major projects and programs, and how did DFC go about rethinking and funding projects in Africa amidst COVID-19?
Mr. Boehler: I’ll let Worku or Vib, you want to answer that?
Mr. Gachou: Sure. Thanks so much, Marissa, and thanks for that excellent question. I think we recognized right out of the gate that COVID was going to have instrumental impacts for our current client base, and recognizing that, we established a facility that our board approved those powers and delegated it to CEO Boehler to support existing clients that are faced with extreme hardship to postpone or suspend certain principal payments of loans that we have extended to them, and this is recognizing that. And in most cases, our clients aren’t earning revenues because of shutdowns or because of – because of certain government policies in an effort to contain the pandemic.
And so, recognizing that, we did not want their obligations to us to be a burden upon them, right. As they’re trying to keep their head above water, as they’re trying to find creative ways to adapt, to grow in this tough environment, we wanted to ensure that our debt service and other payments that were due to us are – aren’t front of mind. And so with this new authority delegated to us, right, we have the ability to postpone and suspend certain principal payments, and then also excitingly, there is a big liquidity crunch on the continent, right, and so a number of our clients are looking for additional capital. And so we have the ability to further inject capital in these companies to ensure that they stay alive throughout the pandemic so that they can come out on the other end stronger.
Vib, I’m not sure if you want to add anything else.
Ms. Jain: I was just going to add on the deal origination side, I think one of the trends that we’ve seen emerge during the wake of the pandemic has really been we were already aware that supply chains and logistics on the continent required significant additional investment, and I think some of the strains around cross-border trade and even domestic movement of goods and people have really been highlighted, and I think we’re seeing a lot of interesting opportunities come to the surface to resolve some of these weaknesses of which we were aware but perhaps, as a financing community, were not – were not doing enough to support.
Moderator: Excellent. So at this time I’m just going to ask Mr. Boehler for his final remarks, any final commentary, reminders that you’re like our audience to have. My one reminder is, get the app. DFC has an app. [Laughter.] Download the app. Already working on that. But Mr. Boehler, final words, please.
Mr. Boehler: I think the most important thing here is that we are out there. The United States is heavily committed to the continent through Prosper, through DFC. You’re going to see us doing more and more deals. We’re looking forward to welcoming African heads of state in September, if it can be done safely. And – but this has been a huge commitment. It is over half of our portfolio in the United States, and so – and you will continue to see a major commitment to this region.
Moderator: All right. That concludes today’s briefing. I would like to thank CEO Adam Boehler, Worku Gachou, and Vibhuti Jain of the Development Finance Corporation for speaking to us today. And thanks to all of our journalists for participating. If you have any questions about today’s briefing, you may contact the Africa Regional Media Hub at AFMediaHub@state.gov. Thank you.
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