BUILD Act: DFC Powers, Investment Limits, and Reauthorization

The Better Utilization of Investments Leading to Development Act of 2018, known as the BUILD Act, is the federal law that created the U.S. International Development Finance Corporation (DFC) to channel private investment into developing countries. Signed into law as part of Public Law 115-254, it merged older federal development finance programs into a single agency with broader powers, including the authority to take equity stakes in projects. After a December 2025 reauthorization, the DFC operates under a $205 billion investment cap and is authorized through the end of 2031.¹

Why Congress Passed the BUILD Act

Before 2018, the federal government’s development finance tools were spread across two agencies and hadn’t kept up with the market. The Overseas Private Investment Corporation (OPIC), created in 1971, could lend money and insure investors against political risk but could not buy equity. USAID ran a separate loan guarantee operation called the Development Credit Authority. The two programs overlapped, competed for staff, and together lacked the scale to match what other governments were offering.

China’s Belt and Road Initiative was a direct catalyst. Lawmakers wanted a credible U.S. alternative for developing countries that were being offered Chinese infrastructure loans on opaque terms. A witness at a Senate hearing told the committee that “the United States should not seek to compete dollar for dollar with China but rather play to our strengths.”² The Congressional Research Service later described the law as reflecting “congressional interest in countering China’s ‘One Belt, One Road’ initiative and elevating U.S. development finance impact.”³ The strategy was to use government-backed financial instruments to pull in private capital rather than to spend more grant money.

What the Law Created

The BUILD Act dissolved OPIC, absorbed USAID’s Development Credit Authority, and established the DFC as a wholly owned government corporation within the executive branch, operating under the foreign policy guidance of the Secretary of State.⁴ Its statutory purpose is to mobilize private capital and expertise for economic development in less developed countries and in economies transitioning from nonmarket to market systems.

Every existing OPIC loan, insurance policy, employee, and contractual obligation transferred to the new agency so that active projects would not be disrupted. The new structure put all federal development finance under one roof.³ The DFC’s powers are vested in a Board of Directors made up of senior government officials (including the Secretaries of State, Treasury, and Commerce, the USAID Administrator, and the DFC’s CEO) alongside private-sector members appointed by the President and confirmed by the Senate.⁵

What the DFC Can Do

The BUILD Act gave the new agency a wider toolkit than OPIC ever had. A single project can combine several of these instruments to reduce risk enough that private investors will participate.

Loans and Loan Guarantees

The DFC can lend directly to businesses and guarantee loans made by private lenders. This carried over from OPIC largely unchanged, and it remains the workhorse tool for projects in markets where commercial banks won’t lend affordably.

Political Risk Insurance

The agency insures investors against losses caused by currency inconvertibility, government interference, and political violence, including terrorism, with coverage of up to $1 billion per project.⁶ Commercial insurers generally won’t write policies of this type in fragile markets, so the DFC’s coverage often decides whether a project moves forward.

Equity Investments

Equity was the headline new power. OPIC could only lend or insure. The DFC can actually buy ownership stakes in projects and investment funds, though the statute limits it to minority positions: no more than 40 percent of the equity in any single project, and equity across the portfolio cannot exceed 35 percent of the agency’s total exposure.⁷ Private investors keep control; the DFC’s participation is meant to attract additional capital. The 2025 reauthorization added a dedicated $5 billion equity revolving fund at Treasury so the agency no longer needs project-by-project appropriations to make equity investments.¹

Technical Assistance

The DFC can also fund feasibility studies, planning work, and training to move promising projects to the point where private financing becomes possible. Where practical, the statute requires recipients to share these costs and reimburse the agency if the project succeeds.⁸

The Investment Cap

The BUILD Act originally capped the DFC’s total outstanding exposure across all loans, guarantees, insurance, and equity at $60 billion. The FY2026 National Defense Authorization Act raised that ceiling to $205 billion.¹ The cap measures the total outstanding value of active commitments, not annual spending.

Where the DFC Can Invest

The statute directs the agency to prioritize less developed countries, with eligibility keyed to World Bank income classifications.⁴⁹ The 2025 reauthorization widened the geographic reach considerably. The DFC can now operate in all countries except the twenty wealthiest, and even those are eligible for projects in energy, critical minerals and rare earths, and information and communications technology, including undersea cables.

Two guardrails apply. For any investment in a high-income country, the DFC’s CEO must certify the deal in writing to congressional committees before support is provided. And no more than 10 percent of the total investment cap can be committed in wealthy and high-income countries regardless of sector.¹ The law also bars the DFC from operating in designated “countries of concern,” which excludes adversarial nations. Projects already approved keep their eligibility even if the host country’s income classification later changes.⁴

What the DFC Cannot Finance

Some categories are off-limits regardless of location or return. The agency’s environmental and social policy bars support for:¹⁰

Projects that degrade critical habitats, absent a biodiversity plan showing no net loss of threatened species.
Large dams that cause significant, irreversible ecological harm or displace 5,000 or more people.
Any project that displaces 5,000 or more people.
Production or trade in substances banned by host country law or international agreement, including certain pesticides, ozone-depleting chemicals, and PCBs.
Export of mercury compounds and manufacture of mercury-added products.
Manufacture or marketing of asbestos fibers and asbestos-containing products.
Shipping oil or hazardous materials in vessels that don’t meet international maritime safety standards.
Projects affecting UNESCO World Heritage Sites or protected areas listed by the UN, absent environmental findings of no degradation and net positive benefits.
Certain harmful marine and coastal fishing practices.

Every DFC financing agreement also includes binding labor protections drawn from the Trade Act of 1974: the right to organize and bargain collectively, prohibitions on forced labor and the worst forms of child labor, minimum-age rules, and acceptable standards for wages, hours, and workplace safety.¹⁰ The DFC applies the International Finance Corporation’s Performance Standards and the World Bank Group’s Environmental, Health, and Safety Guidelines when assessing project risk.

Oversight and Accountability

The BUILD Act built several oversight layers into the agency. A dedicated Inspector General, operating independently of DFC management, has authority to audit and investigate fraud, waste, and abuse.¹¹ The original statute required risk and audit committees to monitor portfolio health, and the 2025 reauthorization formalized a Chief Risk Officer role.

The agency also runs an Independent Accountability Mechanism (IAM) that handles complaints from communities affected by DFC-funded projects. Eligible complaints go to either a problem-solving track that works with both sides or a compliance review that examines whether the DFC followed its own environmental and social policies.¹² On the reporting side, the DFC submits regular portfolio performance and development-impact reports to congressional committees. Under the 2025 reauthorization, the CEO must also produce a five-year Strategic Priorities Plan with input from a congressional advisory council, and must file annual reports on any planned investments in high-income countries.

The 2025 Reauthorization

The original BUILD Act carried a sunset provision that would have ended the DFC’s investment authorities in October 2025.¹¹ Congress extended those authorities through December 31, 2031, in the DFC Modernization and Reauthorization Act of 2025, enacted as part of the FY2026 National Defense Authorization Act in December 2025.¹ Alongside the extension, Congress:

Raised the total investment cap from $60 billion to $205 billion.
Created the $5 billion equity revolving fund at Treasury.
Opened eligibility to all countries except the twenty wealthiest, with sectoral exceptions for energy, critical minerals, and telecommunications even in those countries.
Set the per-project equity ceiling at 40 percent.⁷
Expanded hiring authority, compensation bands, and training pathways so the agency can compete for financial-sector talent.

The reauthorization kept the core mandate to prioritize less developed countries. The 10 percent cap on exposure in wealthy and high-income markets is the guardrail keeping the bulk of the portfolio pointed at the places where private capital is scarcest.

1
DFC. DFC Secures Expanded Authorities with FY26 NDAA Signed into Law
2
Congress.gov. China’s Belt and Road Initiative – Senate Hearing
3
Congressional Research Service. U.S. International Development Finance Corporation
4
Office of the Law Revision Counsel. 22 US Code 9612 – United States International Development Finance Corporation
5
DFC. Board of Directors
6
DFC. Insurance
7
Office of the Law Revision Counsel. 22 US Code 9621 – Authorities Relating to Provision of Support
8
Office of the Law Revision Counsel. 22 US Code Chapter 103 – Better Utilization of Investments Leading to Development
9
World Bank Data Help Desk. World Bank Country and Lending Groups
10
DFC. Environmental and Social Policy and Procedures
11
United States Congress. HR 302 – FAA Reauthorization Act of 2018
12
DFC. Independent Accountability Mechanism