Following an announcement by President Biden and G7 heads of state at the G7 Leaders Summit, U.S. International Development Finance Corporation (DFC) on Saturday June 12 revealed it will support efforts for a new global infrastructure initiative focused on values-driven, high-standard, and transparent projects to help narrow the tremendous infrastructure gap in the developing world. The Build Back Better World (B3W) strategic partnership will be led by major democracies to help meet the developing world’s infrastructure needs in the 21st century.
“Under President Biden’s leadership, the United States and our G7 partners are launching a shared vision based on high standards and values for global infrastructure development,” said DFC Chief Operating Officer David Marchick. “DFC looks forward to delivering on these efforts by working with our partners to finance quality, inclusive, and environmentally sustainable economic development across the globe.”
Specifically, B3W will seek to mobilize private-sector capital in four areas—climate change mitigation and adaptation, global health, information and communications technology, and gender equity and equality, especially in the least developed countries in Africa, Asia, and Latin America and the Caribbean.
As a lead partner in B3W, the United States will seek to mobilize the full potential of its development finance tools such as DFC. By offering sustainable and transparent financing to help narrow the $40+ trillion infrastructure need in the developing world, which has grown substantially wider during the COVID-19 pandemic, DFC will support the goals of B3W in addition to the following guiding principles:
Values-Driven Vision. Infrastructure development carried out in a transparent and sustainable manner—financially, environmentally, and socially sustainable—will lead to a better outcome for recipient countries and communities.
Good Governance and Strong Standards. An emphasis on supporting an array of high standards and principles, such as those promoted by the updated Blue Dot Network, relating to the environment and climate, labor and social safeguards, transparency, financing, construction, anticorruption, and other areas.
Climate-Friendly. Investments will be made in a manner consistent with achieving the goals of the Paris Climate Agreement.
Strong Strategic Partnerships. Infrastructure that is developed in partnership with those whom it benefits will last longer and generate more development impact. Infrastructure created under B3W will be developed through consultation with communities and assessing local needs as a true partners. A G7 taskforce will be created to coordinate, harmonize our efforts, and increase impact and reach.
Mobilize Private Capital Through Development Finance. Augmenting development finance tools to support and catalyze a significant increase in private capital to address infrastructure needs. Infrastructure investment by a responsible and market-based private sector, paired with existing and enhanced public funding, is crucial for long-run development effectiveness and sustainability.
Enhancing the Impact of Multilateral Public Finance. Working with international finance institutions to enhance their catalytic impact and increase the mobilization of capital—both public and private—needed for impactful and sustainable infrastructure investment.
DFC’s development mandate combined with its diverse financing tools make the agency an essential component of the Administration’s strategy to deliver on these key principles. DFC will work closely with other U.S. government partners such as USAID, and enhance collaboration with its G7 development finance institution partners, to strengthen the scale and scope of our collective infrastructure investments in developing countries.