Tuesday, May 17, 2022

U.S. DFC's Solar Investments Hit Major Roadblock

The U.S. International Development Finance Corporation’s (DFC) Investments in Solar have hit a Major Roadblock: Key Components in Solar Panels, principally Polysilicon, are allegedly Manufactured using the Forced Labor of the Uyghur Population in China’s Northwestern Xinjiang region.

The Agency froze its Pipeline of potential Solar Projects, unable to proceed until it figured out a New Policy, to avoid supporting Forced Labor, losing out on nearly $1 billion worth of potential Investments.

DFC now has a Two-pronged approach to the Challenge:

1 - It’s tweaking Contract language to Stop borrowers from Buying from companies tied to Forced Labor.

2 - Developing Certifications and improved Traceability in the Supply Chain.

But it’s a Work-in-Progress, and Traceability efforts could take years, a DFC Official said.

The Agency is “getting squeezed” as Climate Directives limit Oil and Gas Investments, and Human Rights concerns Restrict Solar Investments, Experts said.

Now, DFC must find a way to stay Relevant in Solar, in a way that doesn’t have Connections to Chinese Supply Chains.

That’s Not the only Setback for the young Agency.

When the White House sent an Emergency Funding Request for Ukraine to Lawmakers last month, it sought to Expand the Countries that DFC could work with to include High-Income Nations affected by the War.

Some worried the Change would undermine DFC’s Development Mandate and divert Funding from Lower-Income Countries.

While the Proposal didn’t make it into the $40 billion Bill, which is now under consideration by the Senate, it points to continued Pressure on the Agency and its Mission.

NYC Wins When Everyone Can Vote! Michael H. Drucker

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