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Home > Home > About Us > Development Finance Institution

Development Finance Institution

​The 2017 federal budget confirmed the Government of Canada’s intention to create a development finance institution (DFI), to be housed within EDC and capitalized with $300 million over five years. Areas of focus will include green economic growth, promotion of the involvement of women and young entrepreneurs, and support for small and medium-sized enterprises.

This confirmation allows EDC to begin designing and building the new organization, which will be a wholly-owned subsidiary of EDC. While this involves researching and learning from the experience of similar institutions abroad, the end result will be a uniquely Canadian DFI.

Once fully operational, the DFI will be headquartered in Montreal.

What is a DFI and what does it do?

DFIs are specialized financial institutions set up to support developing countries’ private sector expansion and sustainability. They fill the gap between commercial financial service providers and various forms of development assistance, bringing financial capacity where it is otherwise not readily available. DFIs support local private sector activity where it generates sustainable development and alleviates poverty.

DFIs, together with the private sector initiatives they support, are intended to be financially sustainable. They do not provide subsidies, and expect a financial return on their activities.

Why create a Canadian DFI?

Many OECD countries have had DFIs for several years, and have the ability to deploy a range of services targeted at the private sector in support of their international development priorities. As part of Canada’s International Assistance Review, Canadian stakeholders expressed strong support for expanding Canada’s development finance toolkit. A Canadian DFI will complement other forms of assistance by leveraging private sector resources and expertise to achieve its objectives. The DFI will contribute to the Government’s commitments under agreements such as the United Nations’ 2030 Agenda for Sustainable Development and the Paris Agreement on Climate Change.

The DFI will help Canada gain greater, longer term visibility and recognition for its development efforts in emerging markets. It will prioritize activities in high development-impact areas.

Why was EDC selected to house Canada’s DFI?

EDC has many of the capacities and skills necessary to build and oversee the operations of Canada’s DFI. By drawing on EDC’s wide array of financial instruments and international expertise, the DFI will be able to support private sector initiatives in places where financial services to businesses are not readily available, and thus benefit the poor in those countries.

How will EDC enhance its expertise?

Working with a mandate focused on sustainable development and poverty reduction will be new to EDC. To ensure it has access to expert advice and guidance on an ongoing basis, EDC will establish an Advisory Council to support the leadership of the DFI. Members will be drawn from the private sector, academia and civil society with particular attention to gender balance and an effort to include members from countries eligible for official development assistance.

Engaging stakeholders

As part of EDC’s commitment to actively engaging with stakeholders, a session was convened on August 1 with parties drawn from business, financial institutions, non-governmental organizations, academia and government. Those parties had previously expressed an interest in the evolution and design of the DFI. The summary of that workshop can be found here.

To support its business development and reach interested stakeholders in its target countries, the DFI will benefit from our established relationships with market and industry players, as well as from our connections with the Trade Commissioner Service and Canada’s development specialists around the world.

EDC’s goal is to create a DFI that reflects Canada’s strengths, offers innovative solutions and supports the successful economic development of the countries where it works.

Comments welcome

EDC is committed to consulting with stakeholders as it undertakes this task. We invite interested parties to review the Discussion Paper drafted by EDC.

Careers

Parties interested in employment opportunities should consult the Professional Openings in our Careers section where vacancies will be posted.