The United States International Development Finance Corporation (DFC) plans to increase direct equity investments in companies, including in Africa and the critical minerals sector, the agency's regional director for the continent has said. The move comes as Washington intensifies efforts to reduce China's dominance over key global supply chains.

Critical minerals have become one of the central battlegrounds in international economic competition, with the United States and other major economies seeking to secure access to raw materials essential for electric vehicles and renewable energy, while simultaneously reducing dependence on China.

In September, the DFC — the principal investment arm of the US government — announced it would invest up to US$155 million in WIOCC, an African digital infrastructure company. The agency described it as the largest direct equity investment it has ever made.

Vibhuti Jain, the DFC's regional director for Africa, told Reuters that the agency intends to deploy direct equity investments alongside, or in place of, other financial instruments when projects carry strategic importance. "You will see the use of equity investments, in addition to other instruments or in lieu of them, when there is strategic importance," she said.

Jain said the agency currently has several projects under review for equity-type investments, including in Africa and in the critical minerals sector, but declined to provide details. She added that in the near term, lending, credit guarantees, and political risk insurance would continue to account for a larger share of the DFC's activity than direct equity stakes.

"But I think as the agency continues to grow, we will do more equity investments," Jain said, indicating that the modality is expected to play a greater role in the institution's portfolio over time.

The DFC has investment commitments exceeding US$14 billion across Africa, according to Jain, who identified critical minerals projects and related initiatives as among the primary drivers of new investment flows. More than US$3 billion of those commitments are linked to the critical minerals sector, the agency has said.

"This is indeed a sector we are paying a lot of attention to," Jain said. Among the African projects backed by the DFC are initiatives related to rare earth elements and a graphite mine in Mozambique — raw materials of significant importance to a range of industrial and technological applications.

Beyond financing critical minerals projects, the DFC is also supporting the rehabilitation of the Lobito Corridor, a transport route linking copper and cobalt mines in central Africa to the Atlantic coast. The infrastructure is considered strategically important for facilitating the movement of these minerals and strengthening links between production zones and international markets.

Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=551344