US DFC Targets AI, Minerals in Expansion
(Bloomberg) — A U.S. development-finance institution on track to triple funding aims to invest in data centers for critical minerals and energy as well as artificial intelligence, according to a senior official.
The U.S. International Development Finance Corporation will focus on projects in Latin America as well as rich countries outside its mandate, such as Canada and Australia, Conor Coleman, DFC’s chief investment officer and chief of staff, said in an interview.
“You’ll see us progress a lot faster as we move into the new year,” said Coleman.
The DFC, first created under the Trump administration, emerged in his second term as an important tool in the United States’ effort to control economic and commercial interests in foreign policy. DFC’s financing capacity will be increased from $60 billion to $205 billion and the list of countries in which it can operate will be expanded under a bill Trump is scheduled to sign later on Thursday.
Trump appointed Ben Black, son of billionaire Leon Black, to head the DFC.
“America’s foreign investments must serve the American people and strengthen our position as a global leader for peace and prosperity,” Black said at an event Wednesday.
Coleman said artificial intelligence data centers are “of great importance” to the agency, referring to the “digital Silk Road” for combating foreign adversaries.
A key priority for DFC’s expanded efforts will be critical minerals, particularly in medium-term processing projects in countries such as Canada and Australia, he said.
“I think that’s where you’ll immediately start to see us at play when it comes to high-income country investments,” Coleman said. DFC announced a $5 billion critical minerals consortium in October.
“We use our debt and equity vehicles to invest broadly in companies at the extraction and processing stage, making sure that we have the capacity for U.S. and U.S.-compliant parties on the processing side, and then on the extraction side, making sure that we actually have controls on where acquisitions are going for our investments,” he said.
Critical minerals, energy and infrastructure will also be key sectors when DFC begins operating in Ukraine next year, according to Coleman.
The Washington-based agency plans to open a New York City office early next year to hire more Wall Street talent and expand financing options, he said.
“The idea of taking more risk, being more flexible providers of capital and playing in mezzanine, structured equity or common equity rather than just traditional, senior, secured project finance lenders will really open us up to mobilizing more private capital,” said Coleman.
“We should see two, three, four times the private sector dollar coming with us on our investments,” he said.
(An earlier version of this story has been corrected to reflect that DFC operates only outside the United States.)
–With help from Loukia Gyftopoulou.
(Quote added to the tenth paragraph.)
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