The US International Development Finance Corporation (DFC) is considering deploying equity in Latin America, as it has done previously in other regions such as Southeast Asia.
Like most multilaterals, the DFC traditionally works on the lending side, but it also has an appetite for equity, as demonstrated in a few transactions in other regions.
“We have not done an equity deal in LatAm yet, and are eager to do that. We are open to different types of transactions,” said David Penna, senior vice-president in the DFC's office for strategic initiatives, who participated in IJGlobal's IJLatAm 2020 conference alongside his colleague, Kristie Pellechia, senior advisor for the Western Hemisphere.
In order to help Latin American countries improve their ability to attract foreign investment, the DFC is also studying different ways to lend in local currency without increasing the risk of having to subsidize the transactions in the long term.
“We are trying to get creative in order to guarantee local currency lending,” said Pellechia. One option being considered by the DFC is providing dollar-denominated guarantees, among other innovative solutions.