USA: A Projects: Agency Financing Overview
Multilaterals, development finance institutions (DFIs), national government agencies and export credit agencies (ECAs) have traditionally, and continue to be, a source of affordable financing for energy and infrastructure projects and can accept risks that commercial lenders are not willing to.
US Agencies in Transition
US agencies have played a significant role in the efforts to support alternative energy and energy transition projects where commercial funding was unavailable or unaffordable. Consistent with the priorities of the current US Federal administration, the focus has shifted to critical supply chain (particularly with respect to critical minerals and advanced technology semiconductors) and energy independence for projects being supported in the United States by the Office of Energy Dominance Financing (EDF, formerly Loan Programs Office) and other offices of the Department of Energy (DOE), the CHIPS Program Office (CPO) of the Department of Commerce (DOC), and the Office of Strategic Capital (OSC) of the Department of War (DOW). Similarly, the focus of the Export-Import Bank of the United States (US EXIM) Make More in America Initiative has shifted, with a particular emphasis on mining and critical minerals.
DOE
Funding by EDF and other DOE offices remains available under the Infrastructure Investment and Jobs Act, the Inflation Reduction Act and Public Law 119-21 (commonly known as the One Beautiful Bill Act (OBBA)). Although we observed a substantial slow-down while DOE performed its review of transactions entered pursuant to these authorities pursuant to the “Unleashing American Energy” Executive Order (10 January 2025), DOE’s loan and grant programmes have a re-energised impetus, with a focus on the current administration’s priorities, playing an important role in an “all energy” strategy, focusing efforts on nuclear, hydro, geothermal and more efficient fossil fuel power, critical minerals, transportation and storage, among other technologies.
The International Development Finance Corporation (DFC)
DFC was created with bipartisan support under the prior Trump administration, and FY2026 National Defense Authorization Act (NDAA) included the bipartisan DFC Modernization and Reauthorization Act of 2025. As a result, DFC is chartered through 2031, enjoys increased investment limits and has more flexibility to make equity investments. Furthermore, DFC’s geographic reach now covers all international geographies other than enumerated ‘‘countries of concern’, allowing for some ability to invest in the wealthiest 20 countries for projects related to energy, critical mineral, rare earths and information and communication technologies, including undersea cables.
US EXIM
US EXIM now benefits from full board quorum and experienced leadership appointed to key origination and decision-making roles and a bill is pending to extend its charter. The “Make More in America” programme, which offers potential financing for manufacturing and infrastructure projects that support exports, is gaining prominence and momentum, particularly for mining and metals projects. For international projects, US EXIM has been featured in plans to collaborate with allies like Australia and Japan in strengthening the global supply chain for critical minerals and is also active in nuclear power projects using Westinghouse’s AP1000s and other US nuclear technology.
DOC
CPO continues to process applications and award funding for semiconductor manufacturing and related supply chain projects. CPO entered into multiple transactions and preliminary term sheets between August 2024 and January 2026. Despite prior questions about the future of the programme, the current administration has shown its interest in continuing the use of this important tool to pursue its priorities supporting key industries for technology manufacturing in the United States and to rely less on foreign suppliers. In addition to traditional loans and grants, CPO funding includes direct funding awards, combining grant- and loan-like features, including, in some cases, collateral, parent guarantees and upside-sharing arrangements. A significant development in CPO transactions is the inclusion of warrants and other equity or quasi-equity instruments as part of their various funding transactions.
DOW
The Department of Defense’s Office of Strategic Capital (OSC) programme has significantly ramped up its activities, having received about USD9 billion in financing requests, particularly partnering with or supplementing funding provided by other agencies of the United States. The OBBA expanded the lending authority of OSC to include “dual use” technologies and process that enable national security and defence priorities, and provided OSC with an additional USD1.5 billion in appropriations for its credit programmes supporting gross obligations of up to USD200 billion in loans or loan guarantees.
Global Developments
At the global level, multilateral development finance agencies such as the International Finance Corporation (IFC) and IDB Invest have actively supported solar, battery and wind projects, not only to “greenify” the grid and displace thermal generation, but also to supply industries looking to reduce their carbon footprint, such as mining. In recent times due to Paris treaty commitments, some agencies have been reluctant to support gas-to-power projects, with exceptions only for projects located in countries lacking baseload power; however, we are seeing renewed activities from multilaterals in the gas-to-power sector (eg, IDB Invest and support of the Manzanillo gas-to-power projects in the Dominican Republic from CAF – Development Bank of Latin America and the Caribbean). Small modular reactors and nuclear-related infrastructure are a growing area of interest for European, US and Asian agencies given the absence of commercial funding sources. Although several green hydrogen projects have been announced in countries with abundant and cheap renewable energy, some of the larger export projects may struggle to attract agency funding due to the difficulty of securing long-term committed offtakes and an uncertain regulatory environment.
Critical Minerals and supply chains
Ongoing geopolitical tensions have led to prioritising the financing of projects that produce critical minerals for batteries, semi-conductors and smart devices. Whilst ECAs have traditionally led financings in the mining sector (in particular K-EXIM, K-SURE, Export Development Canada and the Japan Bank for International Cooperation), DFIs including DFC have started to actively support projects involving extraction or processing of copper, nickel, lithium, graphite and other critical minerals, as well as the recycling or synthetic production of minerals.
Commonplace issues in securing long-term offtake and sourcing minerals from safe and reliable countries have prompted a wave of interest in on-shoring or near-shoring supply, such as graphite mining in the United States and Canada and lithium mining in Argentina. The emphasis on continuity in the supply chain has led agencies worldwide to support value-added activities (eg, refining, manufacturing of battery components) that are co-located with and linked to mining projects, as well as large scale EV factory and data centre projects. We expect the trend of ECAs from countries exporting materials or technology teaming up with domestic agencies to continue. On the flip side, the risk of trade wars may complicate the economics of such projects by making the sale of equipment or access to markets uncertain.
Innovations in risk mitigation products
Various innovative agency products have evolved, especially amongst Washington DC-based multilaterals and DFIs, driven by political pressure for greater capital mobilisation and in some cases (particularly amongst certain DFIs) increased geopolitical and economic competition. IDB Invest has deployed its “B-bond” product (where bond investors fund projects under the umbrella of the IDB) across a variety of sectors and jurisdictions whilst the Multilateral Investment Guarantee Agency (MIGA) has made versatile use of its Non-Honoring of Financial Obligations’ insurance cover for default risk by sovereigns, sub-sovereigns and state-owned borrowers, including coverage for swap termination costs arising under dollar-funded local currency financings, as seen in the Findeter transaction in Colombia. Meanwhile, DFC, with its wider mandate under the BUILD Act, has made innovative use of both its investment guarantee and political risk insurance products to support local currency financings of infrastructure, such as in the Rio Smart Cities project, as well as coverage for sovereign debt swaps to help countries raise cheaper debt, with cost savings being deployed for conservation and development projects (eg, river conservation in El Salvador, marine conservation in Gabon). It is anticipated that these products, as well as fund structures, will be deployed further to support financings for greenfield projects in countries facing political instability or security challenges.
Water, food security and health
Traditionally agencies have been at the forefront of supporting healthcare, agriculture and water supply and treatment projects that are small-scale and have limited scope for private sector capital mobilisation. Post-COVID, the agencies’ participation in the healthcare space has expanded with several initiatives in Africa, Asia and Latin America to finance the construction of medical manufacturing facilities and distribution infrastructure, where European DFIs and regional multilaterals have provided substantial support (eg, Aspen Pharmacare’s injectables facility in South Africa and a further loan for Aspen Treasury in 2024 to extend operations in several emerging markets). Larger scale water treatment, desalinisation and cold storage transportation projects have also taken off due to concerns about food security and climate change, attracting significant investments from agencies both on the debt and equity side. The key to the successful funding of these capital intensive projects has been the application of public-private partnership models, where agencies, through their product offerings and innovative structuring solutions, have been well-placed to tackle the challenge of marrying the profitability and bankability priorities of private investors with the delivery of essential public goods and services at an affordable cost.