DFC’s New Direction? What We Know from FY26 So Far

Earlier this year, we examined the US International Development Finance Corporation’s (DFC) FY25 active project data and found an agency in transition: new commitments had fallen sharply after several years of growth, amid early signs of strategic reorientation. Now, with data from the first two quarters of FY26 in hand, the trend appears even starker. DFC is doing fewer deals, writing bigger checks—or in the case of its guarantee and insurance products, backing bigger ones—and betting heavily on mining. Here’s what we know about the agency’s portfolio, along with questions about what comes next.

Fewer projects, bigger commitments

Digging into the data, it quickly became clear that project count and total committed volume tell two different stories. The agency recorded seven new commitments by the end of Q2 this fiscal year, down from 14 at the same point in FY25 and 24 in FY24.

Meanwhile, dollars committed by the same point in FY24 totaled $801 million, compared to $1.87 billion by the end of Q2 in FY25. So far this year, FY26’s new exposure sits at $1.28 billion—ahead of FY24’s pace despite deal count falling to roughly a third of FY24 levels. In other words, what’s changed isn’t so much the pace of spending as how that capital is being deployed, namely across a much smaller number of transactions.

The trend is also evident when looking at median investment size. Across all of FY24, the median DFC commitment was $15 million. By the end of FY25, that figure jumped to $35.75 million. So far in this fiscal year (just Q1 and Q2), the median deal is $50 million.

Is mining the new finance?

Investments in the Finance & Insurance sector have historically dominated DFC’s portfolio by both the number of projects and the dollar amount. Throughout the entirety of FY24, the sector accounted for more than 50 percent of the agency’s new commitments. Even with far fewer deals overall, Finance and Insurance still led the pack in FY25.

As of halfway through FY26, a new sector has taken over: Mining, Quarrying, and Oil and Gas Extraction deals make up the bulk of DFC’s FY26 committed dollars, accounting for 91 percent of confirmed commitments, which is $1.165 billion across just three projects. Finance and Insurance, by contrast, has fallen to just two projects, with commitments totaling $25.5 million.

Meanwhile, among DFC’s board-approved projects and publicly announced deals that haven’t yet hit the published database, quite a few likewise constitute support for extractives: a tungsten mine in Kazakhstan, a nickel project in Brazil, a graphite operation in Mozambique, an antimony mine in North Macedonia, and an intent to invest in a mining joint venture in the Democratic Republic of the Congo.

Recently unveiled plans to partner with the World Bank's Multilateral Investment Guarantee Agency to de-risk investments in Ukraine could serve the country’s broader rebuilding efforts, though critical minerals and energy are among the priority sectors of the related investment fund.

A portfolio in transition?

These shifts are consistent with DFC’s own stated direction. The agency’s FY26-30 Strategic Plan, released in May of this year, opens by describing DFC as “America's premier tool for economic statecraft,” signaling a deliberate emphasis on strategic goals. While not completely abandoning its OG—or OD, original development—mandate, the agency has clearly reordered its priorities.

December’s long-awaited reauthorization underscored strategic competitiveness as a central part of DFC’s mandate. The agency taking that directive and running with it isn’t much of a surprise, given that DFC had been clamoring for the latitude to work in wealthier countries—and had voiced greater interest in foreign-policy-aligned investments in energy and critical minerals.

But the reauthorization passed last year also reinforced the agency’s mandate to deliver development impact and maximize private capital mobilization.

Many of the latest deals that are defined—in no small part—by competition would seem to speak clearly to national security objectives and offer potential development benefits (particularly where the US is demanding higher project standards), but may not clear the bar for financial additionality—that is, crowding in private capital where it is otherwise unavailable.

In our view, reauthorization envisioned DFC doing some of both. With plenty of headroom still available, there should be room for more of the investments that define a catalytic development finance institution. That won’t be easy. Building a pipeline of projects that mobilize private capital where it is scarce is inherently challenging, particularly because deals in underdeveloped markets tend to be smaller and require more legwork per dollar committed. Nonetheless, the ambition to do more with the agency clearly exists at the top: the president’s FY27 budget request once again included plans for a $3 billion revolving equity fund for DFC that has yet to receive a green light from Congress. Over the past year and a half, the Trump administration has carried out a massive overhaul of US international assistance, leaning increasingly on DFC’s instruments as a core tool of its global engagement. Investments in extractives account for a rapidly growing share of DFC’s portfolio, but the agency’s statutory mandate—and its credibility—will depend on demonstrating that it can contribute to longer-term development objectives across a range of sectors while playing to America’s strengths.