U.S. development agency looks to boost funding to $60 billion
NEW YORK (Reuters) - The head of the main U.S. agency for aiding developing country infrastructure projects said on Monday the ability to extend funding for such investments is expected to double if new legislation is approved by the U.S. Congress.
Ray Washburne, president of the Overseas Private Investment Corp, told Reuters that the inclusion of the “Build Act” into must-pass legislation reauthorizing the Federal Aviation Administration will accelerate the expansion and redesign of the agency.
“We’ve got our running shoes on now,” Washburne said, highlighting that the legislation will allow OPIC to extend its financing portfolio to up to $60 billion from its current $29.5 billion.
“You have to remember, (legislation) is going to double the size of an agency. It is going to take some time to get it out there,” he said, noting the vote in the House of Representatives is due on Wednesday, with the Senate expected to vote soon thereafter.
A key provision will allow it to take an equity stake in projects rather than just lend money or provide political risk insurance to help foster private investment in emerging markets, an area where competition from Chinese state-owned enterprises has become particularly fierce.
“Equity authority gives us the ability to go in an participate with other countries. That’s one of the important things. The United States is being left behind in a lot of countries because we didn’t have the same financing products that other countries have,” Washburne said.
If the legislation passes, OPIC will be renamed the U.S. International Development Finance Corp. Last year, Washburne said, OPIC made $270 million in profit.
He earlier spoke before the Concordia Annual Summit, an event on the sidelines of the United Nations General Assembly meeting in New York where he said China’s Belt and Road infrastructure initiative is everywhere, but that the United States was looking to re-engage in places like Latin America.
“The Chinese have thrown $1 trillion at this. We are not trying to match them dollar-for-dollar,” he said. “Again, our deals have to pencil-out economically. A lot of their projects don’t. We’re not going in building bridges-to-nowhere type things, whereas the Chinese seem to have done that, to a big extent.”
Reporting by Daniel Bases; Additional reporting by David Lawder in New York; Editing by Leslie Adler