OPERATOR: Ladies and gentlemen, thank you for standing by and welcome to the U.S. International Development Finance Corporation call. At this time all participants are in a listen-only mode. Later, we will conduct a question and answer session; instructions will be given at that time. If you should require assistance during today’s call, please press star then zero. As a reminder, today’s call is being recorded. I would like to turn the conference over to your host, Marissa Scott. Please go ahead.
MODERATOR: Good afternoon to everyone from the U.S. Department of State’s Africa Regional Media Hub. I would like to welcome our participants dialing in from across the continent and thank all of you for joining this discussion. Today, we are pleased to be joined by Adam Boehler, CEO of the new U.S. International Development Finance Corporation. Mr. Boehler will discuss his trip to Africa, the new agency he leads, and the DFC’s activities at the Africa Investment Forum. Mr. Boehler joins us from Johannesburg, South Africa.
We will begin today’s call with opening remarks from Mr. 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, which is approximately 20-25 minutes. At any time during the call, if you would like to ask a question, you must press star one on your phone to join the question and answer queue. If you would like to join the conversation on Twitter, please use the hashtag #AFHubPress and follow us on @africamediahub.
As a reminder, today’s call is on the record, and with that, I will turn it over to CEO of the Development Finance Corporation Adam Boehler. Mr. Boehler, the floor is yours.
BOEHLER: Well thank you very much, and thank you for joining me, everybody. One, I want to identify that I’m really happy to be back in South Africa. My first professional experience out of school was working for a brief stint over a summer for the Financial and Fiscal Commission, which is a government agency in South Africa, and it was super motivating for me growing up. I grew up in a small town outside of Albany, New York, reading about Nelson Mandela and all of the changes in the African National Congress, and that was very inspiring and why I went and spent time working in South Africa. And I went to Mbeki’s inauguration during that time, and so a lot has changed over the last 15-20 years, but it’s wonderful to be back in South Africa and in Africa in general.
So what I wanted to cover, generally, is one, a little bit about the International Development Finance Corporation, and then around our commitment to the continent. We were formed recently by something called the BUILD Act that the U.S. Congress passed, and it’s a new agency. It came from the root of the Overseas Private Investment Corporation, or OPIC, and DFC, as is the acronym, is really focused on investing in emerging countries. And the big difference – there are a number of big differences from before, that Congress gave us – one is they doubled the amount of capital that we had to invest, and so we went from $30 billion to $60 billion of dollars to invest. The second thing was they expanded out our flexibility in terms of investments. They added equity capability, so we have the ability to invest in equity; we have the ability to invest in debts, and then we do insurance, reinsurance, political risk reinsurance, so we have a whole spectrum of products that we didn’t have before.
The other thing is they really focused us on developing countries, so really, our mark, even though I noted the amount of dollars, the way we measure our success is by making impact – development impact – and that’s what we’ll look at. And so in any kind of project we’re looking at, we’re thinking hard about how are we driving development and impact in frontier and emerging countries.
The final thing I’ll note, and this was clear as I got confirmed in the role is speaking about U.S. foreign policy and our priorities. And one thing I’d like to note about DFC is that we believe that development is driven by empowering host countries. Our job is to honor a country’s sovereignty. It means that we are investing in local workforce. We are respecting their environment. We’re respecting their standards, and we’re ensuring that a country is not indebted. And so what we’re doing now in Africa is we’re sitting down, and obviously, in this event, there are plenty of folks from many different countries – in fact, I just came from meeting the leader of one recently – where we’re saying, “Let’s not just talk about one or two individual deals, but how can we make a sustained commitment that is going to drive development in a positive way?” So I’d note that.
The final thing I’ll note is that after South Africa, we’re headed to Ethiopia, and I will personally note that we’ve been very impressed with what the administration has been doing there. Obviously it’s been a model and very inspiring, perhaps in the same way that I was inspired when I was younger by Nelson Mandela. There’s some really inspiring things going on in Ethiopia, and so I will say I’m personally very excited about that visit. I’m personally excited about opportunities to partner, so I have high expectations. We met last week in Washington when the Egyptian delegation came and met with the President of the United States and others and had a great intro meeting. Very excited to follow up on that.
So let me turn it to you for questions.
MODERATOR: Thank you, Mr. Boehler. We will now begin the question and answer portion of today’s call. For those asking questions, please state your name and affiliation and limit yourself to one question related to the topic of today’s briefing: the new International Development Finance Corporation and its activities during the 2019 Africa Investment Forum.
For those of you listening to the call in English, please press star one on your phone to join the question queue. If you are using a speakerphone, you may need to pick up the handset before entering star one. For those of you listening to the call in French and Portuguese, we have received some of your questions submitted in advance by email and you may continue to submit your questions in English via email to firstname.lastname@example.org.
Our first question goes to Xolani Sibiya from Leano in South Africa: how will the institution effectively distribute its funding into the countries? Will it have regional offices? If yes, then where in Africa?
BOEHLER: Thank you for the question, and I think it’s a very good question. The reason is, in order to be successful, I think a local presence is very important. So let me talk a little bit about how we’re focusing there. One is we did get some funding to expand out our own local offices; we will clearly have staff here in Joburg, and then we’re considering other countries as well to make sure we have a local presence.
The other thing that’s very important, and I want to think about when you think about DFC, we’re a tool among many within the U.S. government, and so I also want to be cognizant of all the fantastic embassy staff, mission directors from USAID, and so one of the key things here is partnering to get the benefit of all of U.S. government, and we’ll be working very closely with our other U.S. government allies to make sure that we have enough feet on the ground.
MODERATOR: Thank you. The next question goes to U.S. embassy Addis Ababa, who’s hosting a listening party with several journalists. Addis, are you on the line?
QUESTION: Hey, my name is Bereket from Ethiopian News Agency. My question is what kind of support that you’re going to provide for African entrepreneurship, African entrepreneurs or new startups? And then what are the basic areas of engagement or the specific areas that you really want to entrust in or engage in?
MODERATOR: Okay, if I may try to repeat that question…
BOEHLER: Okay, let me just [UNCLEAR]
MODERATOR: Okay, did you hear it okay?
BOEHLER: Yeah, that would be helpful. I think I know, but go ahead. Yeah.
MODERATOR: Okay, what would you do to assist in developing African entrepreneurs? That was the first part of the question, and unfortunately I didn’t hear the second part. Operator, could you let the journalist ask the second part of his question again?
OPERATOR: Yes, please go ahead.
QUESTION: Okay. My second question is, like, what are the specific areas of your engagement? Maybe like is it on the agricultural sector, or in the, like, manufacturing. Could you explain more on that?
BOEHLER: Yeah, sure. Okay, I got it. Thank you very much for repeating that. Let me start in terms of area of focus, and it’s funny, so we just today signed an MOU with the African Development Bank. And I’ll bring this up, why I’m saying this, in a moment, but it’s a critical relationship for us because I want to recognize the ability to partner. It’s a key area, and I think ADB has done a great job on the ground, and so I think you’ll see us moving very closely, and the president of ADB and I have developed a very strong personal relationship, and I think that we have a lot of the same mission and values as an organization.
One of the conversations we had, though, was the importance of balance in investing. And what I mean by that is it is very key and very critical, and everybody knows that there is a need for infrastructure investment in Africa; whether that’s in ports, whether that’s in other facilities. However, it’s also critical that we need to get dollars direct to entrepreneurs as well. And so we want to pursue a balanced investment strategy, and let me give you a specific example of the deals. We did a deal in Uganda where we are getting dollars direct to taxi drivers and tuk-tuk drivers there, because they were on a constant stream of indebtedness and couldn’t get out of that, and there was no one that would bank them. So we did a financial services deal, and the goal was to create sustainability for drivers direct.
We’ve done a lot of deals where our goal is to get dollars directly to women entrepreneurs. We have a fantastic women’s 2X initiative that we will continue to expand. And I think those aspects are just as important as the big port, the big pipeline. Those are equally important; luckily, I have the resources to pursue them both, but I think a balanced strategy, because some of those things are going to pay off in the medium- to long-term, but some of those things are going to pay off tomorrow, and I want to see both of those pursued as we go forward. So that’s critical.
And then from a sector perspective, there you’re going to see focus on agriculture, on renewable energy, on infrastructure, on healthcare, so those are kind of key sectors that we’re going to focus on.
MODERATOR: Thank you. The next question goes to Kate DeAngelis of Friends of the Earth in the United States. Ms. DeAngelis, are you on the line? Okay, I will ask her question. The question is: how will you ensure that the DFC meets its congressionally-mandated limits on the greenhouse gas emissions of its portfolio?
BOEHLER: So anytime the DFC looks at any deal, it goes through a whole bunch of requirements. And that includes from a greenhouse gas perspective as well as human capital, and a number of other issues, and so what I will say is if we’re looking at a development deal that has a negative impact on the environment, the bar is going to be a lot higher.
MODERATOR: Thank you. Will the DFC be an alternative to China’s debt diplomacy in Africa and elsewhere? How?
BOEHLER: I’m sorry, who did that question come from?
MODERATOR: This question came in from one of our emails. Will the DFC be an alternative to China’s debt diplomacy in Africa and elsewhere? And how?
BOEHLER: Okay. Well, I’ll take the question because I don’t mind it, but generally I prefer to know who my question’s coming from, but that’s okay.
So here’s what we’re focused on: I’m not so focused on China. I’m going to let China play China’s game. We’re here to play our own game, and so we’re going to be out there, and I will tell you that it is important, and I’ll tell you where people should partner with us. Those countries that are interested in rule of law, in someone that is going to empower their local workforce, that cares about their local environment, that is not focused on significant debt loads – we do not want countries to be in indentured servitude because of high debt loads – and to have a country that’s focused on quality infrastructure. And my view on this stuff is we may not always be the quickest in the world, but I guarantee you we will be the best, and you get what you pay for. And so what you will see, and I will tell you, as we’ve gone out and we’ve spoken to leaders of African countries, what they’ve said is, “Adam, we want an alternative here. We need an alternative here,” and that is what Congress did in BUILD Act. They created a very significant alternative, and now my job, as Congress has asked me to do and as the president has asked me to do, is go out there and strike these strategic deals to fulfill our mission.
You will see a view that empowers the sovereignty of a country. Our view is we are supporters, we are partners; it is not my place to tell somebody what to do, that is a country’s place, and you’ll see us behind them, supporting, but that’s where we’re going to win out vis-à-vis anybody. You’ll also see a lot of partnership from us; as I mentioned, we just partnered with the ADB. We’ve got a great partnership with the Japanese. We’re going to partner with the British. So you’re going to see a combination of allies out there that have similar ideals, and for those countries that share those ideals, we’re there for you. And it’s time for us to step up our game.
MODERATOR: Thank you. Operator, we’re going to go back to the U.S. embassy in Addis Ababa. Addis, the line is open for a question from one of your journalists.
OPERATOR: One moment, please. I apologize; which…? I apologize [UNCLEAR]
MODERATOR: While we’re getting them back on the line, we’ll go to another question from South Africa: will the entity rely on U.S.-based organizations for origination and due diligence on the transactions? It seems to be a very particular question about transactions from Ms. Sibiya from the Leano in South Africa. Again: will the U.S. rely on origination of loans and due diligence on transactions? Hopefully that’s clear.
BOEHLER: Well, I think the answer is – so I guess there’s a difference obviously in sourcing deals versus carrying the deals out. And one thing I will compliment, the DFC credit team and the deal team has done a wonderful job. If you look at our history over time, we have not lost money. In fact, made money, which I think is important for two reasons: one, it’s a commitment to the American taxpayer that ensures support in this area. But two, it means that the project is sustainable. When it’s not a handout, it’s sustainable, and that is going to teach somebody to fish instead of having any reliance on the United States. My job over time is to hand everything that I can to the private market and empower the private market. And so one thing I’ll note is we’re going to continue to look at every deal closely. Now, that said, when we’re partnering, if we can partner together and we’re comfortable with some of the things that ADB does or the JBIC guys in Japan, or the World Bank. In certain areas, we might be able to have a shorter diligence process so that we can expedite things, because my goal is to make sure that we can move in a rapid way while still maintaining great standards. I don’t want to spray money around in an unresponsible way, but we will be looking to leverage and learn from our partners also.
MODERATOR: Thank you. Operator, let’s go back to Addis Ababa. Do we have a journalist on the line?
QUESTION: Thank you. This is Nardos from Reporter [Newspaper]. So you’ve been telling us about the engagement contracts you have done so far. So I want to know about what’s next.
MODERATOR: I didn’t quite understand that question; can you repeat it again, please, slowly?
QUESTION: Okay, so you’ve been telling us about the engagement points that you have done, so far, so can you tell us what you will do next?
QUESTION: I think she’s asking about what’s the next strategy as we’ve been talking about the engagement so far.
BOEHLER: Well, my next strategy is to fly to Ethiopia tomorrow and meet your administration. I don’t know if that’s what you’re asking, but I’ll just pay a compliment, because I think a compliment is due. I think phenomenal leaders are people that inspire hope but also take action and make changes, and I think you have an administration that has obviously – and you know this better than me – gotten off to the right start, and so my next step and my next action is to fly to Ethiopia tomorrow and sit down and make sure that we are supportive and see how we can work together.
MODERATOR: Excellent. That’s all that we have time for; I’d like to ask Mr. Boehler if you have any parting words.
BOEHLER: I appreciate all the time, and I’d just like to re-emphasize DFC and their commitment to this continent. It’s been fantastic to see development over the last several decades, and I think we’re really poised to do a lot on the continent, so we’re very excited to engage, and we’re very open in who we engage with. I believe that dialogue is very important in all circumstances, and I hope with our new partnership with ADB you’ll start to see the fruits of that. So thank you for spending time, and I appreciate and look forward to a lot more conversations to come.
MODERATOR: That concludes today’s call. I want to thank Adam Boehler, CEO of the new U.S. International Development Finance Corporation, for joining us, and thank you to all of our callers for participating. If you have any questions about today’s call, you may contact the Africa Regional Media Hub at email@example.com. Thank you.