DFC keen on rare earths-linked investment in Vietnam
The U.S. International Development Finance Corporation (DFC) is not a newcomer to Vietnam, and made headlines during President Biden’s visit to Hanoi last month with two deals totaling $400 million. In an interview, DFC spokesperson Pooja Jhunjhunwala shared the views on the institution’s priority areas in Vietnam such as rare earths, infrastructure and energy and how investment can advance reforms.
Could you share the reasons DFC has financed the deals inked during President Biden’s visit to Hanoi last month? What criteria did those beneficiaries meet to be funded?
DFC is a U.S. development finance institution. We partner with the private sector to finance solutions to the most critical challenges facing the world today. One major challenge facing much of the developed world is insufficient access to finance. In many developing countries like Vietnam, small businesses are the foundation of the economy, but struggle to access the financing needed to hire workers and grow. Businesses owned by women and other underserved groups are often particularly challenged.
DFC CEO Scott Nathan, who recently traveled to Vietnam with President Biden, announced more than $400 million in new DFC financing to help expand access to finance, by providing loans to two major Vietnamese banks VPBank and TP Bank, to bolster lending to small businesses in the country, including those businesses that are owned by women and often face especially significant challenges accessing finance.
Like all DFC projects, VPBank and TP Bank were screened and vetted to ensure they comply with international environmental and social standards, as well as demonstrate a successful business track record.

DFC CEO Scott Nathan (third from right) and TP Bank CEO Nguyen Hung (third from left) shake hands in the presence of Special Presidential Envoy for Climate John Kerry in Hanoi, September 10, 2023. Photo courtersy of DFC.
As Vietnam and the U.S. have upgraded bilateral ties to a comprehensive strategic partnership, the highest diplomatic designation in Vietnam, what will be DFC’s priorities in Vietnam? What are the sectors that are likely to receive financing from DFC? Does DFC have more Vietnam projects in the pipeline?
Vietnam is currently DFC’s largest market in Southeast Asia, and DFC is committed to financing private sector investment opportunities in Vietnam to bring our relationship to even higher levels.
While DFC supports investment across a range of sectors, priority areas of focus include infrastructure and critical minerals, energy, health, food and agriculture, and small business support – through transactions like the VPBank and TP Bank deals.
Across our entire portfolio, we also focus on investments that address climate change, and support women and other underserved communities.
During U.S. President Biden’s visit to Hanoi, he and Vietnamese Prime Minister Pham Minh Chinh agreed to make science, technology and innovation a new pillar in bilateral ties. Does DFC’s strategy align with this? As a federal agency, what can DFC do to contribute to Vietnam-U.S. relations?
DFC is committed to supporting private sector investment in innovative technology projects, such as internet and mobile service operators, telecommunications towers, and data centers, as well as projects that are leveraging technology to support other functions such as fin-tech and online education. Investments in information and communications technology enhance economic activity and quality of life in the developing world by expanding access to healthcare, education, and food, while making business more efficient and secure.
For example, DFC recently committed $15 million dollars to Wavemaker Impact, a climate-tech fund investment in Southeast Asia which is dedicated to reducing carbon emissions in the region through innovative solutions.
In addition, through our investment in private equity funds, we have supported multiple high-tech startups that are a source of both innovation and jobs for an increasingly educated workforce. For example, Beacon Fund has used DFC financing to invest in multiple IT businesses including Topica EdTech, which provides online undergraduate programs to students across Southeast Asia.
The Biden administration sees Vietnam as a critical partner in its Indo-Pacific strategy and the country has huge needs for critical infrastructure and energy development. Can we expect Vietnam to have some kind of priority of financing from DFC in these sectors?
The two transactions announced during CEO Scott Nathan’s recent visit to Vietnam almost tripled our portfolio of investments in Vietnam that are helping farmers reach larger markets, investing in small businesses, and providing growth capital to innovative startups.
Worldwide, DFC has active investments in more than 110 countries. DFC considers prospective projects that meet the agency’s eligibility criteria and evaluates every potential project to identify and mitigate possible economic, environmental, social, and other risks, and to assess the project’s potential to achieve positive developmental impacts through diligence tools such as technical feasibility studies, strong track record and proof of equity, and local support for the project.
PM Chinh met with many American technology companies during his visit to the U.S. last month and asked them to increase their presence in Vietnam. How can DFC facilitate those connections? Does DFC have any plan to get involved in semiconductor/rare earths projects in Vietnam?
We have a long history of supporting American businesses in emerging markets, and our finance tools – including loans and guaranties, equity, and political risk insurance – help these businesses gain a presence in these markets.
DFC can support investment throughout the supply chain for critical minerals including production and processing to help meet increasing global demand while supporting positive developmental impacts.
These tools can extend to investments that enable critical minerals production, mining, and trade, for example, by improving transport links or power supply to these projects.
DFC continues to identify additional potential opportunities for critical minerals investment.
What barriers has DFC faced when implementing these projects?
DFC has supported multiple projects in Vietnam across a range of sectors from IT to aquaculture to financial services. We recognize that businesses often encounter challenges operating in developing markets and our finance tools are designed to help mitigate those challenges.
We seek to work with businesses that have strong track records, and we conduct extensive due diligence on prospective projects prior to committing financing.
Does DFC have any recommendations for the Vietnamese government to improve the business climate?
DFC’s ability to finance investments depends on the presence of a strong enabling environment and governance that supports private investment and creates clear goals that can serve as a basis for partnerships with the private sector. DFC coordinates closely with our colleagues at organizations like USAID and the State Department, which are well-positioned to support partner countries with these efforts.
DFC’s mandate is to support developmental and strategic transactions, and we do so in over 110 countries. In short, investment can advance reforms, and reforms can in turn attract investment.
When DFC origination and monitoring teams visit projects that DFC supports around the world, we see how private capital can initiate a virtuous cycle in which investment fosters reforms and reforms can further attract the investment that is needed. That is one of the reasons DFC’s private-sector-led approach to development is so effective.
After the Better Utilization of Investments Leading to Development (BUILD) Act was signed into law in October 2018, DFC was formed in 2019 by merging Overseas Private Investment Corporation (OPIC) and USAID’s Development Credit Authority.
DFC invests across sectors including energy, healthcare, critical infrastructure, and technology. DFC also provides financing for small businesses and women entrepreneurs in order to create jobs in emerging markets.
During President Joe Biden’s visit to Vietnam on September 10-11, DFC signed deals with TPBank and VP Bank, under which DFC will provide seven-year loans of $100 million and $300 million.
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