The US International Development Finance Corporation (DFC) plans to increase direct equity investments in Africa, particularly in critical minerals, as Washington seeks to reduce China’s influence over strategic global supply chains.
Vibhuti Jain, the DFC’s regional managing director for Africa, told Reuters that the agency has several potential equity investments in its pipeline, including projects in Africa’s critical minerals sector. She said equity funding could complement or replace other financing options for strategically important projects.
The agency will continue to rely mainly on loans, credit guarantees and political risk insurance, although Jain said equity investments would increase as the DFC expands.
The DFC has more than $14 billion in investment commitments across Africa, with over $3 billion directed towards critical minerals projects or related activities.
Its investments include rare earth developments, a graphite mine in Mozambique and the rehabilitation of the Lobito transport corridor, which connects copper and cobalt mining areas in Africa to the Atlantic coast.
In September, the agency announced plans to invest up to $155 million in African digital infrastructure provider WIOCC, its largest equity commitment to date.
Critical minerals have become increasingly important to the United States and other major economies seeking secure supplies for electric vehicles, renewable energy and other strategic industries while reducing dependence on China.
Leave a comment