Increased Funding for Strategic International Development Projects—Better Utilization of Investments Leading to Development Act of 2018: The BUILD Act of 2018 Replaces OPIC With a New Entity With Significantly Increased Resources and Expanded Capabilities Intended to Promote Private Sector Investment and U.S. Foreign Policy Interests in the Developing WorldSullivan & Cromwell LLP - October 3, 2018
Earlier today, the United States Senate joined the House of Representatives in passing the BUILD Act, which, pending President Trump’s signature, will overhaul and replace the Overseas Private Investment Corporation (“OPIC”) with the International Development Finance Corporation (“IDFC”). IDFC will have significantly more authority than OPIC to facilitate and encourage U.S. private investment in the developing world, including the ability to make direct equity investments, and its $60 billion maximum contingent liability is more than twice that of OPIC’s. The legislation also permits IDFC, unlike OPIC, to support non-U.S. sponsored projects even though it requires that IDFC give preference to projects sponsored by or significantly involving U.S. entities. IDFC is also required to prioritize U.S. small business. If signed by the President, as is expected, many details about IDFC’s operations will come to light when the President submits a plan of reorganization detailing how he plans to set up the government-owned corporation, which is chartered for seven years.