US agency seeks to expand investment reach into the Caribbean

The United States’ federal investment arm is expanding its reach in the Caribbean, where the U.S. International Development Finance Corporation is hoping to soon begin reviewing proposals to boost energy and improve infrastructure such as seaports and airports.

A top official with the federal agency, which helps finance projects in developing nations, is scheduled to visit Jamaica, Trinidad and Tobago, and Antigua and Barbuda starting on Monday to meet with government officials and private sector leaders to better understand countries’ investment priorities. The intent is to broaden the agency’s pipeline of projects while also giving Caribbean governments an alternative financing option that until now hasn’t been available.

“We’re very excited to be able to expand our investments in the Caribbean following our reauthorization and are actively building our pipeline,” said Caroline Vik, chief policy officer for the U.S. International Development Finance Corporation, DFC.

Created under a 2018 law that combined operations of the Overseas Private Investment Corp. and part of the U.S. Agency for International Development, the DFC launched in 2019. While its investments have become a vehicle for Washington to advance foreign policy and national security concerns such as giving nations an alternative to China’s controversial Belt and Road Initiative, the Caribbean has until now remain mostly outside its focus.

The agency provides a range of financing tools, including loans, equity investment, political risk insurance, loan guarantees and project development funding. Project development funds support early-stage work that’s needed to prepare large investments for markets, including feasibility studies. It’s proven to be a really useful product for big infrastructure projects for critical minerals, really across the board, officials say.

Ahead of the visit, agency officials have met with ambassadors and ministers from the region. The trip is expected to be the first of several for the DFC, which has previously worked a deal in Jamaica but not in Antigua or Trinidad.

“We’ll be doing a series of government meetings as well as private sector meetings to find the companies and partners that can help us execute on the government’s investment priorities,” Vik said.

Among the agency’s global priorities, are strengthening supply chains for critical minerals, pharmaceuticals, agricultural inputs such as fertilizer and crop protection.

Energy is also a major focus. The agency is already financing a lot of natural gas projects while also exploring investments in geothermal energy. It’s also seeking opportunities to help build critical infrastructure, such as ports and airports, and strategic transportation corridors and digital infrastructure such as telecommunications and data centers.

“In the Caribbean, we’re really looking to understand in as much depth as possible, country by country, what are the leadership’s priorities, what are the key limiters for economic development and where they intersect with our priorities is where we’ll focus our efforts,” Vik said.

So far countries have conveyed that they are prioritizing seaports, airports, energy, and information and communications technology, all of which require significant investment.

In Jamaica, Vik plans to meet with the Port Authority, the National Reconstruction and Resilience Authority, cabinet minister and business leaders. In Trinidad and Tobago, meetings have been schedule with telecommunication regulators, the ministers in the economic cabinet to talk about upcoming public tenders and the officials in charge of cybersecurity and artificial intelligence. In Antigua, she will meet with Prime Minister Gaston Browne, the Port Authority, energy companies and investment groups in the energy sector.

The DNC is “extremely excited to be there to dig in on a lot of these opportunities and to hopefully find a series of projects that we can execute on in the next couple of years,” said Vik.

Agency officials say conversations with leaders across the region have also highlighted another need: replacing Chinese-made equipment that’s falling apart. They note that many of the countries being targeted have not had a lot of viable alternatives for investment, and the DFC is trying to now fill that gap.

Caribbean leaders, who ended a four-day summit in Saint Lucia last week Wednesday, said it was too early to comment on the initiative. Others who are familiar with the agency cautioned that one of the long-standing issues is that it takes too long to get deals financed.

Still, momentum is growing to expand investment in the region, which has long struggled to attract large institutional investors and is often limited when it comes to bankable projects. During the CARICOM meeting, heads of government met with private-sector leaders over breakfast to discuss both investment challenges and opportunities.

The meeting was sponsored by the Organization of Eastern Caribbean States Business Council and the CARICOM Private Sector Organization and brought together more than 120senior representatives of various institutions including development finance partners—including the Inter-American Development Bank, the Caribbean Development Bank and the CARICOM Development Fund,

Among the discussion items: removing barriers to intra-regional trade, reducing transportation and logistics costs, diversifying imports, mobilizing regional investment capital and strengthening tourism linkages.

“The discussions reflected a strong consensus that regional governments, the private sector and organized labor must move beyond policy dialogue to coordinated implementation, supported by clearly defined mandates, timelines and measurable outcomes,” a statement from the business groups said..