DFC Modernization Act of 2025

This bill modifies and reauthorizes the Better Utilization of Investments Leading to Development Act of 2018, which governs the U.S. International Development Finance Corporation (DFC). It expands the DFC's investment tools, raises its risk tolerance, increases its maximum contingent liability, and extends its authorization through 2031, while adding new definitions, restrictions on support for high-income countries, and prohibitions on projects involving countries of concern or state-owned enterprises.

Sec. 101, Definitions: Adds definitions for 'high-income country' and 'country of concern' (including Venezuela, Cuba, North Korea, Iran, China, Russia, and Belarus) to the DFC's governing law.

Sec. 102, Less developed country focus: Amends the DFC's mission to include support in high-income countries and areas when certified by the President as furthering U.S. national economic or foreign policy interests, but restricts such support otherwise.

Sec. 201, Board of Directors: Reduces the number of Senate-confirmed board members from 5 to 3, allows the President to designate one other principal officer from an executive department, and changes the vice chairperson to be appointed by the President.

Sec. 202, Chief Risk Officer: Removes the requirement that the Chief Risk Officer report directly to the board and changes the officer's focus from audit to risk.

Sec. 203, Chief Development Officer: Eliminates the statutory position of Chief Development Officer, reassigns its duties to the Chief Executive Officer, and removes references to USAID from the CEO's responsibilities.

Sec. 204, Administratively determined positions: Increases the cap on DFC employees not subject to competitive service from 50 to 100.

Sec. 301, Equity limitation: Raises the maximum equity stake the DFC can hold in a project from 30% to 49%.

Sec. 302, Revolving equity investment account: Establishes a separate Equity Investments Account in the Treasury, allowing the DFC to retain and reuse earnings, fees, and other collections from equity investments without further appropriation.

Sec. 303, Enterprise funds: Removes the requirement for USAID Administrator involvement in enterprise funds and strikes references to USAID.

Sec. 304, Termination: Extends the DFC's authority to operate until December 31, 2031, instead of 7 years after the original enactment.

Sec. 401, Corporate powers: Updates the DFC's corporate powers by removing outdated references to other laws and lease provisions.

Sec. 402, Maximum contingent liability: Increases the DFC's maximum contingent liability from $60 billion to $250 billion.

Sec. 403, Authority to use portion of corporation fees to update information technology systems; transfer of funds: Expands how the DFC can use its fees, including for project-specific transaction costs and transfers to other accounts, and clarifies that fees can cover costs for seminars and pre-investment services.

Sec. 404, Notifications to be provided by the corporation: Raises the threshold for notifying Congress about DFC transactions from $10 million to $100 million.

Sec. 405, Millennium Challenge Corporation: Removes references to USAID and the Millennium Challenge Corporation from coordination and information source provisions.

Sec. 406, State-owned enterprises: Requires the DFC to develop policies for projects involving state-owned enterprises, prohibits support for projects with anticompetitive practices or partnerships with countries of concern, and defines key terms.

Sec. 407, Repeal of redundant provisions of the European Energy Security and Diversification Act of 2019: Repeals that act as redundant.