Landmark legislation to reform the way the United States gives development aid could become law by the end of the year, according to the Senator behind the bill.
As previously reported, the legislation would double the amount that America can lend to projects in the developing world from $29 billion to $60 billion, while also setting up a new institution: the International Development Finance Corporation (IDFC). The IDFC would also support US companies that want to export to low and middle-income countries.
Significantly, the new IDFC would have the power to make investments as well as lend, meaning it could take on bigger projects in riskier environments. This opens the door to more US investment in large-scale power generation, which the White House has earmarked as a top development priority.
The aid reforms are seen as an essential counterweight to Chinese influence in Africa and developing Asia. Remarkably, given America’s bitterly divided political environment, the new legislation has received bi-partisan support in both houses of Congress, meaning it stands a good chance of becoming law.
Democratic Senator Chris Coons, who co-sponsored the bill with Republican Foreign Relations Chairman Bob Corker, said that the reforms would support the 2015 UN Sustainable Development Goals, which include achieving universal electricity access by 2030.
“I believe the United States should and can play a leadership role in marshaling the world’s efforts toward achieving these goals by 2030,” said Coons.