In this CNAS interview, David Bohigian explains the purpose and evolution of U.S. development finance. He defines development finance as U.S. investment in projects that advance foreign policy and development goals in low‑ and middle‑income countries, carried out through OPIC’s three pillars: political‑risk insurance, project finance, and private‑equity partnerships. He illustrates the model with two recent projects – a power‑plant in El Salvador that will supply over 20% of the country’s baseload electricity, and an Ethiopian facility that will employ more than 500 women. Bohigian links development finance to U.S. national security, citing the 2017 National Security Strategy’s economic pillar and drawing parallels to the Marshall Plan. He describes the Better Utilization of Investments Leading to Development (BUILD) Act as a landmark bipartisan law that will double OPIC’s portfolio from $25 billion to $60 billion, add new tools from USAID, expand technical assistance, and enable broader private‑sector capital mobilization. The conversation turns to strategic competition with China’s Belt‑and‑Road Initiative; Bohigian frames the rivalry as a contest of models, emphasizing five principles for responsible financing – sovereignty, environmental stewardship, local workforce upskilling, anti‑corruption safeguards, and project durability. He highlights the private‑sector advantage of the United States, especially the 2X women’s initiative that has committed over $1 billion to women‑led businesses, arguing that this creates “entrepreneurial societies” that push for transparency. Finally, he outlines operational goals for 2019: the launch of the new Development Finance Corporation on Oct 1, expanded global engagement, and a request for adequate congressional resourcing to sustain the expanded mission.
Chapters
Well, thanks, Dan, for all your true thought leadership. It's a term thrown around this town a lot, but really appreciate the work that you and CNIS have done. and everyone in this room. You know, development finance is actually pretty simple. It is investing in projects that advance U.S. foreign policy and development goals in low and— low and middle income countries around the world. So it helps those countries develop through true investments. It's across a range of sectors and we work in political risk insurance, we work in project finance, we work in private equity. with the private sector, so truly catalyzing capital into the world's most difficult problems. OPIC has a more than 40-year track record of making money for taxpayers, but that's not our first goal. Our first goal is to help societies become prosperous and stable.
So can you give us just quickly a kind of a concrete example of a project that would highlight how OPIC works on the ground?
Sure. Well, just 2 weeks ago, I was in El Salvador for the presidential inauguration of Bukele, a friend of the United States. where we were able to deliver on behalf of the Overseas Private Investment Corporation more than 20% of their baseload energy power through a plant that we're going to do. So that's transformative for an economy to have a fifth of their energy being provided by the United States. A month before that, I was in Ethiopia with Senior Advisor Ivanka Trump, where we toured a facility that OPIC is going to invest in that employs more than 500 women and helping disadvantaged women create stable families and stable societies. So it really is that kind of range that we have across utility-grade energy to solar and wind, up through infrastructure including ports and airports, but small and medium-sized businesses around the world.
So I want to ask you, the President, the Vice President, and the Secretary of State have all referenced development finance in their speeches. What role does OPIC play in U.S. national security and specifically in sharpening America's competitive edge?
Well, we were really pleased to see the National Security Strategy come out in 2017 that included an economic pillar that's stronger than ever before. And one of the reasons the National Security Strategy is stronger is because it thinks about not just trade as an economic pillar, but also investment. Einstein once said that you can't solve problems at the same level of consciousness at which they were created. And I think when you're talking about development and defense and diplomacy working together, you can solve things that siloed solutions would have eluded them. So when the national security pillar rests on economic development, I think that's what we've seen since the Marshall Plan. Creating these societies helps us avoid any sort of conflict at times.
So one of the big news items in the last year in kind of the development finance world was the passage of the Better Utilization of Investment Leading to Development Act, or BUILD Act, which passed with bipartisan support support in Congress. Could you talk a bit about how this legislation will upgrade development finance as a tool for kind of a U.S. competitive approach?
Sure. The BUILD Act really was landmark legislation passed unanimously through the House that will give development finance new unprecedented tools in the United States. Right now, OPIC has about a $25 billion portfolio in almost 90 countries. The opportunity the BUILD Act gives us to take that portfolio to $60 billion, which remember, that's catalyzing private sector capital to the tune of hundreds of billions of dollars. So it really gives us an opportunity to scale. Second, it actually modernizes and helps us with new tools from USAID, their development credit authority, a loan guarantee program that's been successful will be consolidated in the new Development Finance Corporation. We'll have technical assistance, we'll be able to focus more on low and lower middle income countries because we won't have to work with only U.S. investors. So it really is a range of tools that helps complement what the State Department is doing and what DOD is doing. I was with the Acting Secretary of DHS yesterday. It really has upgraded development finance, and not just from a whole-of-government approach here, but it makes us more interoperable with our allies. We work closely with Japan and Australia. We work closely with the British, the French, the Dutch, the Germans, and more in Europe. And we're able to collaborate more than ever because of the tools the BUILD Act's given us.
So I want to ask you about the dragon in the room, which is China. And as the head of the Asia program, of course, I have to ask about China. But I think it's pretty clear that America's current emphasis on development finance is very much driven by concerns about Chinese infrastructure projects, whether physical or digital, around the world under the banner of what China calls One Belt, One Road. And I would ask, I know that you've spent a lot of time traveling around the world, including many of the countries taking Belt and Road investments. Sitting at OPIC, what's your take on the Belt and Road? What do you see happening on the ground? What are your concerns?
Well, this reminds me to a certain extent of the Marshall Plan and the Molotov Plan. We all know the Marshall Plan, one of the great successful plans in history on making societies more stable. The Molotov Plan, lesser known, was the Russian response to try and drop an economic Iron Curtain around Eastern Europe, and it failed because it was a closed system. And so while Marshall said our enemy is not any one country or ideology, it's hunger, disease, poverty, and despair, I think you've seen development finance from the Western perspective be able to combat each one of those problems. And so today when we see working with our allies around the world, there are new challenges that we need to face. And I'm trying to create a race to the top. with them across 5 factors that I think are crucial for policymakers to consider in development finance. So when a country is thinking about taking development finance loans, I think first they need to consider their own sovereignty. We've seen places in the world that have lost their sovereignty because they couldn't pay a loan back. Second, they need to make sure they're respecting their environment. Third, crucially, they need to ensure they are upskilling their own local workers and not having workers imported and actually depressing wages in hurting their economy. Fourth, it's really important to consider anti-corruption measures in procurement processes. And then fifth, these projects are built to last. You are building things on behalf of your taxpayers in these countries that should last for generations. So I think there's a choice out there on countries being on a journey to self-reliance that I think the Western model and private sector-led development really should lead the way in the 21st century.
That definitely sounds right to me. I mean, at CNAS, we've done a lot of research looking at China's pattern of infrastructure investments, and certainly there are a large number of challenges. I wanted to press you on one issue, which is resourcing, that the Chinese like to talk about the Belt and Road will involve trillions of dollars of expenditures going forward, which in my view is very much an exaggeration. When you look at more independent assessments of Chinese spending, whether it's infrastructure investment or construction, between 2014 and 2017, it comes to about $400 billion, which is still a lot of money, a lot of money compared to what OPIC will ultimately have. And so how do you see— what's the right approach for the U.S. to mitigate this resource disparity, knowing that the U.S. won't be able to spend the same amount as China can?
Well, I think it shouldn't be that sort of government-to-government comparison. First, appreciate your good work on grading the Belt and Road, because that is helping policymakers here and around the world understand what the contrasts really are. But a major contrast is when you talk about hundreds of billions of dollars or even a trillion dollars for the Belt and Road Initiative, people don't know that the United States alone has a foreign direct investment stock in the Indo-Pacific alone of a trillion dollars, right? So, so many of our companies are already projecting those values and those 5 factors that I was talking about earlier. It's just not state-directed authoritarian money. It's private sector-led development. When you add that up against the other regions in the world, the Western Hemisphere with more than $1 trillion, you add in other Western governments, it's more than $20 trillion in foreign direct investment stock. So actually I think the asymmetry goes a little bit different because we are actively operating as United States corporations globally. in a way that China still isn't?
So, I definitely agree with you that the kind of private sector-led global economic engagement is generally a U.S. comparative advantage. But in some ways, it also can be at times a point of weakness, that if you look at some of the countries where China is investing, they have massive governance issues, large amounts of corruption, political instability, a lot of risk. And so, for U.S. private sector companies, they may not be that interested in investing. Even if these countries are strategic from a kind of U.S. national security perspective. So I'd be interested, it's a question I've grappled with, I don't have a good answer to it. What are your thoughts? How can, whether it's OPIC or the U.S. government or generally, kind of get the private sector in, get it to have a more expeditionary, risk-acceptant mentality?
Well, I think that's exactly what development finance does. We are part of the investor group that really has a halo effect, right? I often say that when we make an investment, it comes with an ambassador. It comes with political risk insurance that's been fine-tuned over almost the last 50 years that OPIC helped invent. It comes with private equity where other investors realize there's a seal of approval the U.S. government has done through their due diligence. And project finance that works with world-class partners. So I think that's how we compete. I also think we compete asymmetrically with small and medium-sized businesses as well as our women's initiative. Right, while we also do infrastructure around the world as I mentioned earlier, There's no country in the world that's more admired for its entrepreneurial culture. I've been to more than 70 countries around the world. Every single one of them wants to have a Silicon Valley. There's no country in the world that's helped to be able to empower more women globally. And we're doing that through our 2X program that's investing more than $1 billion in women-led, women-owned, and women-empowering businesses. And that's what's going to create societies— entrepreneurs who are pushing their governments to be more transparent. Women who are investing in their families and their education. That's a game changer that's asymmetric.
So I'm conscious that we're running short on time, so I want to ask you 2 quick questions. The first is, looking out to the end of calendar year 2019, what is kind of one big goal you have for OPIC or development finance generally?
Well, as you mentioned earlier, the BUILD Act transforms development finance, and both from a policy perspective and just from an operational perspective. We're going through a major corporate reorganization. So I'd hope that on October 1st of this year, we've launched the new Development Finance Corporation, and that in and of itself will signal to the world that we are raising our game in development finance. Beyond that, I'm looking for the global engagement that I was looking for earlier and mobilizing new sources of capital. Sustainable development requires trillions of dollars of capital, and the only way to do that, I think, is what I was saying earlier, different silos working together that haven't worked together before. in the past. So we're continually working with new partners all the time and driving them towards the world's great challenges, and that will continue this year.
Great. I want to ask you one final question, that if you look at the past year, the U.S. Congress has been really a critical partner of the executive branch in strengthening development finance as a competitive tool. Congress came together to pass the BUILD Act, for example. And so if you could ask Congress for one thing, and within reason of course, one thing in the next 12 months, what would it be?
My goal over the next 12 months is to create the greatest development force the world's ever seen. And so to do that, it takes proper resourcing, not just from a corporate governance perspective for the, for the new Development Finance Corporation, but more broadly to be able to work with our partners in the corporate sector, to be able to work with our partners with NGOs, to be able to work with our allies overseas. So I think appropriate resourcing as we meet the challenges that are so great is gonna be a key factor in our success.
Well, thank you, David. That was excellent and really enlightening. I hope for all of you, just this gave you a little taste of development finance, which is certainly in our kind of national security apparatus. It's a new tool, but a really important tool as we look out, certainly to strategic competition with China. So if you could all give David a big hand, thank you for being here.
