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Advanced Manufacturing Production Credit has contributed to more than $126 billion in clean energy manufacturing investment announced over last two years.

WASHINGTON – Today, the U.S. Department of the Treasury and the IRS released final rules for the Advanced Manufacturing Production Credit (Section 45X of the Internal Revenue Code), to spur continued growth of U.S. clean energy manufacturing as part of President Biden and Vice President Harris’ Investing in America Agenda.

The Advanced Manufacturing Production Credit helps to level the playing field for U.S. companies to onshore production of critical clean energy technologies like solar and wind components, batteries and energy storage, and critical minerals. The final rules announced today will expand America’s clean energy manufacturing base, create good-paying jobs, strengthen the nation’s energy security, and build the reliable and responsible supply chains needed to meet U.S. climate goals. In particular, the final rules will accelerate the buildout of domestic critical mineral supply chains by allowing taxpayers to include materials costs and extraction costs in production costs for applicable critical minerals and electrode active materials, provided certain conditions are met. This change, based on feedback from stakeholders, will enable further investment in responsible U.S. critical minerals extraction and processing and strengthen U.S. energy security and clean energy supply chains.

“The Biden-Harris Administration’s economic agenda is driving a manufacturing boom across the country that I’ve seen first-hand in North Carolina, Kentucky, and Georgia. These investments are creating good-paying jobs, strengthening U.S. supply chains, and lowering costs for American consumers and businesses,” said U.S. Secretary of the Treasury Janet L. Yellen. “The final rules announced today will help companies continue to invest and innovate in the United States as we buildout our clean energy economy.” 

“The Biden-Harris’s Investing in America agenda is creating game-changing opportunities that will transform our energy economy, promote energy security and ensure America is globally competitive in the 21st century,” said U.S. Secretary of Energy Jennifer Granholm. “These final rules will help strengthen energy dominance while reducing emissions and leveling the playing field for U.S. companies to onshore production of critical clean energy technologies – mitigating our competitors’ market manipulation.”

“The Inflation Reduction Act takes a government-enabled, but private sector-led approach to building America’s clean energy economy,” said John Podesta, Senior Advisor to the President for International Climate Policy. “Today’s final rules will keep fueling America’s clean energy boom, which has already seen nearly $450 billion in new announced investments from the private sector since President Biden and Vice President Harris took office.”

“As part of the resurgence in American manufacturing supported by the Biden-Harris Administration, today’s advanced manufacturing tax credit final rule will catalyze business investment in the clean energy technologies of the future, help secure domestic critical minerals supply chains, and put American workers and businesses in a position to outcompete China,” said National Economic Advisor, Lael Brainard.

“For too long, technologies invented in America were manufactured somewhere else. Not anymore. President Biden and Vice President Harris are finally bringing that manufacturing home,” said White House National Climate Advisor Ali Zaidi. “We are flexing America’s industrial muscle. On factory floors across the country, American workers are now making the technologies of the future. These Biden-Harris tax credits are knocking down barriers to economic opportunity and lifting up union workers. We are revitalizing American manufacturing and rebuilding America’s middle class. This is how we tackle the climate crisis, bolster energy and mineral security, and win the future.”

Since President Biden signed the Inflation Reduction Act more than two years ago, the Advanced Manufacturing Production Credit has been a major driver of the boom in clean energy manufacturing with more than $126 billion in private sector announcements made since the law passed – including around $77 billion for batteries, $6 billion for critical minerals, $19 billion for solar, and $8 billion for wind – according to recent data from the Rhodium Group/MIT’s Clean Investment Monitor (CIM).

Today’s final rules will give taxpayers additional clarity and certainty to drive even more investment in clean energy and critical minerals. Because the Advanced Manufacturing Production Credit is eligible for the Inflation Reduction Act’s novel monetization provisions to help ensure businesses receive the full value of the incentives – elective pay and transferability – the tax credit is particularly powerful for start-up companies that have low tax liability.

The final rules announced today are largely in line with proposed regulations released in December 2023. The final rules clarify definitions and confirm credit amounts for eligible components, including solar energy components, wind energy components, inverters, qualifying battery components, and applicable critical minerals; define key terms to incentivize production in the United States and clarify the circumstances under which taxpayers can claim the credit; and finalize important safeguards to prevent potential fraud, waste, or abuse – including safeguards against duplicative crediting of the same component, crediting of activities that are not value-added, or extraordinary circumstances in which components are produced but not put to productive use.

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WASHINGTON — Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned Mirghani Idris Suleiman (Idris)pursuant to Executive Order (E.O.) 14098, for leading the Sudanese Armed Forces’ (SAF) efforts to acquire weapons for use in its ongoing war with the Rapid Support Forces (RSF). Idris has been at the center of weapons deals that have fueled the brutality and scale of the war, serving as Director General of Defense Industries System (DIS), the SAF’s primary weapons production and procurement arm. OFAC designated DIS on June 1, 2023, for being responsible for, or complicit in, or having directly or indirectly engaged or attempted to engage in actions or policies that threaten the peace, security, or stability of Sudan.

Since the beginning of the war, the SAF has prioritized weapons acquisition, including Iranian drones and a port-for-weapons deal with Russia, choosing to expand the conflict rather than end it through good-faith negotiations. The weapons and diplomatic support provided by Iran and Russia have emboldened the SAF and lessened their interest in deescalating the conflict. 

“Today’s action underscores the essential role that key individuals like Mirghani Idris Suleiman have played in procuring weapons, perpetuating violence, and prolonging the fighting in Sudan,” said Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence Bradley T. Smith. “The United States is committed to disrupting the ability of both sides in this conflict to procure weapons and external financing that undermine the possibility of a peaceful resolution.”

saf procurement leader

Mirghani Idris Suleiman is the head of OFAC-sanctioned DIS, the arm of the SAF primarily responsible for weapons procurement and production. Idris began his career in the officer corps of the SAF, graduating alongside SAF Commander Burhan in the 31st graduating batch. He then served in Sudan’s intelligence service before being appointed to lead the DIS. Since his appointment, Idris has served as the face of SAF procurement, heading several official delegations to potential suppliers. 

Idris is being designated pursuant to E.O. 14098, for being a foreign person who is or has been a leader, official, senior executive officer, or member of the board of directors of the DIS, a person whose property and interests in property are blocked pursuant to E.O. 14098.

SANCTIONS IMPLICATIONS

As a result of today’s action, all property and interests in property of the designated persons described above that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. In addition, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons. 

In addition, financial institutions and other persons that engage in certain transactions or activities with the sanctioned entities and individuals may expose themselves to sanctions or be subject to an enforcement action. The prohibitions include the making of any contribution or provision of funds, goods, or services by, to, or for the benefit of any designated person, or the receipt of any contribution or provision of funds, goods, or services from any such person. 

The power and integrity of OFAC sanctions derive not only from OFAC’s ability to designate and add persons to the SDN List, but also from its willingness to remove persons from the SDN List consistent with the law. The ultimate goal of sanctions is not to punish, but to bring about a positive change in behavior. For information concerning the process for seeking removal from an OFAC list, including the SDN List, please refer to OFAC’s Frequently Asked Question 897 here. For detailed information on the process to submit a request for removal from an OFAC sanctions list, please click here.

Click here for more information on the individuals and entities designated today.

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WASHINGTON – Today, Secretary of the Treasury Janet L. Yellen met with Finance Minister Mohammed Al-Jadaan of Saudi Arabia. Secretary Yellen reaffirmed Treasury’s long-standing and close partnership with Saudi Arabia and discussed with the Minister the outlook for Saudi Arabia’s economy and its reform and development plans. The Minister and Secretary Yellen committed to continue working together in both bilateral and multilateral settings and on combating the financing of terrorism and money laundering.

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WASHINGTON – The U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) today awarded 48 organizations $246.4 million for the development of affordable housing and community facilities serving low-income, families and communities that need additional investment. These awards were made through the fiscal year (FY) 2024 round of the Capital Magnet Fund (CMF). The awards will support financing for the preservation, rehabilitation, development, or purchase of affordable housing, as well as related economic development facilities, including day care centers, workforce development centers, and health care clinics.

“Today’s awards will increase affordable housing supply and expand access to child care and health care for families across America,” said Secretary of the Treasury Janet L. Yellen. “These awards are projected to leverage nearly $9 billion in private and public sector resources to spur development in communities that need additional investment to create opportunities for communities to get ahead.” 

Award recipients are required to leverage their awards with other private and public investment by at least 10 to one, today’s awardees anticipate that they will leverage more than $6.8 billion in private investment. 

The 48 awardees will collectively serve 50 states, the District of Columbia, Guam, and Puerto Rico. In all, 25 awardees (52% of the total awardees) plan to invest a portion of their award dollars in rural areas, with 12 of those organizations planning to invest at least one-fourth of their award dollars in rural areas. Of the total awardees, 25 are Community Development Financial Institutions (CDFIs) and 23 are nonprofit housing organizations. The awardees were selected pursuant to a competitive review of Applications submitted from 136 organizations that requested more than $1.06 billion from the FY 2024 Capital Magnet Fund round.

This announcement will result in more than 26,400 affordable housing units, including more than 25,600 rental units and more than 750 homeownership units. Since its establishment by the Housing and Economic Recovery Act of 2008, the Capital Magnet Fund has created over 63,000 affordable homes, including more than 55,600 rental housing units and 7,400 homeowner-occupied units.

Since its creation in 1994, the CDFI Fund has awarded more than $8 billion to CDFIs, community development organizations, and financial institutions through: the Bank Enterprise Award Program; the Capital Magnet Fund; the CDFI Rapid Response Program; the Community Development Financial Institutions Program, including the Healthy Food Financing Initiative; the Economic Mobility Corps; the Financial Education and Counseling Pilot Program; the Native American CDFI Assistance Program; and CDFI Equitable Recovery Program. In addition, the CDFI Fund has allocated $81 billion in tax credit allocation authority to Community Development Entities through the New Markets Tax Credit Program, and guaranteed bonds for nearly $3 billion through the CDFI Bond Guarantee Program.   

See the FY 2024 Capital Magnet Fund Award book and list of recipients here.

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As Prepared for Delivery 

Since the moment that Russia invaded Ukraine, the United States has worked with our partners and allies around the world to stand strong against Putin’s aggression. As Russia continues its brutal and unjust war, mortgaging its future and economy to move to a permanent war footing, Putin is engaged in a contest of wills with our coalition, and he is counting on us to retreat. Today, alongside my Ukrainian friend and colleague, Minister Marchenko, I want to be clear that we will not retreat, and that we will do everything we can to support Ukraine.

In a decisive sign of that resolve and our solidarity with Ukraine, I am very glad to announce another step forward. The G7 is committed to making $50 billion in lending available to Ukraine by the end of this year. And the United States will join the G7 to provide a $20 billion loan to Ukraine that will be repaid by proceeds derived from Russia’s own assets. This means that as we look ahead, Russia will increasingly be forced to bear the costs of its illegal war, instead of taxpayers in the U.S. and Europe. 

To mark our intention to enter into this loan, and to demonstrate our commitment that profits earned on Russia’s immobilized assets, not new U.S. or Ukrainian tax dollars, will be the source of repayment, Minister Marchenko and I are here today to sign a joint statement. I am glad that we are also joined by Deputy Administrator of USAID Michele Sumilas, as USAID helped make this step possible and will be critical to implementation. 

Supporting Ukraine is important in its own right: to equip a sovereign, democratic country with the tools it needs to protect its people from unspeakable brutality, and its economy from devastation. We are fulfilling a moral obligation. But let me be clear: Supporting Ukraine is also vital for the national interest of the United States. Letting Ukraine fall would invite further aggression by Putin and jeopardize the safety of our NATO allies in Europe, who we are committed by treaty to defend. Supporting Ukraine also sends a broader unmistakable message: wars of choice launched by autocrats across the world will be met with a swift and united response. And supporting Ukraine is essential to upholding the rules-based international order that has supported peace and prosperity for America and the world since the end of World War II. 

For all these reasons, we continue to provide Ukraine with weapons and financial support to sustain its brave resistance. We imposed, and continue to expand and enforce, a historic sanctions regime to deprive Russia of the funds and goods it needs to prosecute its war of choice. We put in place a novel price cap on Russian oil that restricted Russia’s revenues while keeping global energy markets well-supplied. We also immobilized approximately $280 billion of Russia’s sovereign assets held in financial institutions across G7 countries and agreed that they would remain immobilized until Russia pays for the damage it has caused.

In June, President Biden and G7 Leaders proposed a creative solution: a loan that would equip Ukraine with the near-term resources to defend itself and rebuild, repaid by capturing windfall proceeds earned on Russia’s immobilized assets. 

This loan initiative will provide Ukraine with urgently needed funds and will make funds available by the end of this year. It will send a message to Putin that waiting out our coalition is a losing strategy. And it will advance our collective security and the values that have supported our global economy and financial system for nearly a century. 

Let me congratulate my G7 counterparts on the progress we’ve made. The United States will continue to move forward to make good on our commitments and show Putin that we will not back down.

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As Prepared for Delivery

Good morning, everyone. It is an honor to be here today, and I want to thank the Opportunity Finance Network (OFN) for the invitation and Harold Pettigrew and Donna Gambrell for their leadership and partnership over the years. 

I am delighted to be here on behalf of the U.S. Department of the Treasury (Treasury) with leaders from so many community development financial institutions (CDFIs) across the country as we celebrate two great achievements: the 30th anniversary of the establishment of the CDFI Fund and the 40th anniversary of OFN.

Today we honor not just three decades of accomplishments, but also the transformative impact you have made in communities across our nation. Your steadfast commitment to mission-driven capital has uplifted countless individuals and businesses, fostering resilience and growth in areas that would have otherwise gone underserved. 

Over the past 30 years, your ranks have grown tremendously, with now 1,500 CDFIs nationwide, collectively holding about $452 billion in assets. You are the lifeline to people and places that have long been overlooked, underestimated, and cut off from economic opportunity – not because they lack the talent, determination, or ideas but because they do not fit traditional risk models or live in banking deserts. But we know different. CDFIs are built to challenge traditional financing models. In doing so, you fuel homeownership, scale businesses, expand access to childcare, shelter, and health services. Every day you are showing us that when we invest in those most marginalized in our economy, we create greater prosperity for everyone. 

Frankly, your birthday is right on time. CDFIs are reaching a point of maturity at a critical time when your capacity and reach are more important than ever.

Meeting the Economic Moment

The American Rescue Plan, the Inflation Reduction Act (IRA), the Bipartisan Infrastructure Law, and the CHIPS and Science Act—are ushering in a major economic transition that has the potential to reduce longstanding wealth and wage disparities – but only if we act swiftly and work together. 

Treasury has played a major role in deploying a trillion dollars via the American Rescue Plan, and many of you were partners in that effort. Together, we kept people in their homes, saved small businesses, and delivered relief to millions of families all over the country. Our collective efforts helped secure one of the most equitable economic recoveries on record. 

Now we are applying these lessons to our implementation of the Inflation Reduction Act. To date, the IRA has supported the creation of over 2,000 clean energy projects across the U.S., generating over $380 billion in announced investments. What’s even more promising is that these investments are reaching a broader range of communities than ever before. 

For instance, 85% of clean energy investments have been made in areas with below-average wages and 85% have gone to communities with below-average college graduation rates. This growth is an outstanding example of this Administration’s commitment to grow the economy from the bottom-up and the middle-out, not just on aggregate, and to build the strength of the economy by expanding productive capacity in communities that have been overlooked. 

Treasury is also working to bolster clean energy investments in low-income and environmental justice communities through IRA “bonus incentive credits” which help make these clean energy projects possible. 

These include the:

• Low-Income Communities Bonus Credit Program
• The Energy Community Tax Credit Bonus; and 
• Prevailing Wage and Apprenticeship Requirements

Last month, I had the opportunity to visit one such project that is not too far from here: the Sun Valley Bus Yard in Los Angeles, part of the Los Angeles Unified School District’s (LAUSD) electrification initiative. Partially funded by IRA green credits, this project is not only helping LAUSD transition to a fleet of 180 electric buses but is also providing local students with training in electrification technologies. The project’s strategic location — between a community center, an airport, and a high school — means it has the potential to serve as a power source for the local grid, further demonstrating the far-reaching impacts of the IRA. This visit underscored for me how clean energy investments are benefiting both the environment and communities in need, creating pathways to a more equitable and sustainable future.

Climate Investments Advancing Economic Resilience

Our implementation efforts so far are exciting – but we all know partnerships with trusted service providers are integral to the success of federal programs. This is the moment CDFIs have been training for over the last 30 years! That is why the Biden-Harris Administration, the bipartisan CDFI Caucus, and Treasury have worked together to give CDFIs the tools to be a force multiplier in our clean energy economic transition. I want to briefly talk about two examples:

First, included in the IRA is the Environmental Protection Agency’s Greenhouse Gas Reduction Fund (GGRF), including the $14 billion National Clean Investment Fund, the $6 billion Clean Communities Investment Accelerator, and the $7 billion Solar for All program. 

OFN and many other CDFIs, Minority Depository Institutions (MDIs), and trade networks are recipients of GGRF and working closely with other state and nonprofit recipients. Together, you all will create a national financing network for clean energy and climate solutions to reach all communities across the country. It is the deep relationships in communities held by CDFIs that will help ensure that those most risk of being left out of the clean energy transition can access cost-saving technology.

Second, the State Small Business Credit Initiative (SSBCI) is a nearly $10 billion program providing capital to small businesses across the nation. As of year-end 2023, jurisdictions have reported that SSBCI funding has supported more than 3,600 small businesses across the country, facilitating over $3 billion in new loans and investments, $500 million of which was expended to support underserved businesses. About 40% of transactions were reported as supporting underserved businesses.

Participating jurisdictions are just getting started, and already CDFIs have been instrumental to the deployment of funds. Let me share some exciting pieces of data from the first SSBCI report:

• Through last year, over 60% of all SSBCI supported transactions were made through CDFIs, resulting in over $400 million in new financing for small businesses. 
• Over 82% of CDFI transactions involved underserved businesses, a key driver of the program’s ability to reach these entrepreneurs. 
• 55% of CDFI transactions were conducted by CDFI loan funds with average loan amounts around $100,000, supporting businesses with smaller capital needs. 

The SSBCI program also includes funding for technical assistance programs, geared toward providing access to financial advisory, legal, and accounting services for underserved and very small businesses. Treasury has also partnered with the Minority Business Development Agency (MBDA) to launch the Capital Readiness Program which supports businesses through 43 service providers across the country.

Last year Treasury also released an updated CDFI Certification Application after incorporating extensive feedback from community finance practitioners. The updated Certification Application comes at a critical time in which the CDFI field has grown and become more diverse in its structure types, product offerings, and sectors served – and is increasingly serving as a qualifier in many cases for other federal, state, and private sector resources.

Private Sector Partnership

The Administration is also working with the private sector to complement federal efforts to support CDFIs. The Economic Opportunity Coalition (EOC) is a group of more than thirty of America’s leading companies that was launched by Vice President Harris and has the bipartisan support of Senators Mike Crapo and Mark Warner. Already, the EOC has secured over $1 billion in deposits into CDFIs and MDIs and has pledged to reach $3 billion in deposits by 2025.

Conclusion and Call to Action

The Biden-Harris Administration worked with Congress to pass and implement four “once-in-a-generation” bills that will fundamentally transform our economy. Now we need your help. As we reflect on the journey over the past 30 years, it is time to build on your successes to prepare for the opportunities afforded through historic federal investments. 

You are critical to ensuring that borrowers, especially small business owners, successfully navigate changing market demands to capitalize on new opportunities. This includes mapping where capital is landing compared to where opportunities exist, developing strategies that align with emerging economic trends, and staying grounded in community needs to better serve current and future customers. 

Together, we can lay the groundwork for a future where every community has the opportunity to thrive. Thank you for your dedication and your vision.

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As Prepared for Delivery 

Tim, thank you very much for your kind words. I am honored to receive the Institute of International Finance’s Distinguished Leadership and Service Award. And let me thank you as well for your leadership of IIF. Over the past few years, and no doubt informed by your own time at Treasury, IIF members have provided us with important perspectives on a wide range of key policy issues, strengthening our work. 

Here at home, and thanks to the Biden-Harris Administration’s economic agenda, the past year has been characterized by a combination of developments few thought possible. Inflation is significantly down while the unemployment rate remains near historic lows. Economic growth has been strong, bolstered by robust consumer spending and business investment. Looking forward, we are aiming to maintain this momentum, while also addressing long-standing challenges such as the high prices of essentials like housing and health care. We’re pursuing a strategy I have called modern supply-side economics, which aims to expand our economy’s capacity to produce while reducing inequality. 

America’s strong economic performance is also helping power the global economy, which has proven more resilient than forecasters had expected despite unforeseen shocks. But we know that progress has also been uneven. Many economies, including emerging markets and developing countries, are still struggling to recover from their COVID recessions and from the shock to global food and energy prices exacerbated by Russia’s invasion of Ukraine. As we look ahead, global challenges like climate change, pandemics, and conflict and fragility threaten to hold back global growth.

So, from the start of this Administration, we have also charted a new course for America’s international economic policy. We rejected American isolationism and have instead promoted America’s global economic leadership. We’ve focused on stabilizing and strengthening relationships. We’ve worked multilaterally. And importantly, we’ve also seen the private sector—including the financial institutions represented in this room—as a key partner in tackling challenges and in realizing opportunities. 

Take climate change. The Inflation Reduction Act is our country’s most significant climate legislation in history, and it works by giving the private sector the incentives and certainty it needs to invest. According to one estimate, public investments have been met by more than five times as much in private investments. In just the two years since the IRA was passed, this has meant a total of nearly half a trillion in investments in manufacturing and deploying clean energy technologies. 

Abroad, our efforts to drive progress toward a lower-carbon economy extend to working with international partners to implement ambitious Just Energy Transition Partnerships that will crowd in private capital. And we’re channeling private capital to other areas too. The United States launched the G7 Partnership for Global Infrastructure and Investment to help close the world’s significant infrastructure investment gap and we’ve made increasing private sector mobilization at the multilateral development banks a key part of our MDB evolution agenda. 

We of course are working closely with the private sector not only to fuel growth but also to mitigate risks to financial stability, from combatting cyber risks to advancing work on artificial intelligence and tokenization and cross-border payments. 

I’ll be focused on many of these priorities during the Annual Meetings this week and I’m glad to have the chance to reflect on them here with you today. Thank you again for this honor, and I look forward to our discussion.

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The Advanced Manufacturing Investment Credit Will Spur American Job Growth, Fuel Innovation, and Strengthen U.S. Semiconductor Supply Chains

WASHINGTON – Today, the U.S. Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) released final rules for the Advanced Manufacturing Investment Credit (CHIPS ITC) created in the Biden-Harris Administration’s CHIPS and Science Act. President Biden and Vice President Harris championed the CHIPS and Science Act, a key component of the Administration’s Investing in America agenda, to usher in a new era of semiconductor manufacturing in the United States, bringing with it a revitalized domestic supply chain, good-paying jobs, and investments in the industries of the future.

Part of the Biden-Harris Administration’s economic agenda, the guidance released today gives taxpayers the clarity needed to continue making and finalizing investments in U.S. semiconductor manufacturing and semiconductor manufacturing equipment. These investments will help strengthen American supply chains, spur job growth, and catalyze innovation in the technologies of the future. 

The CHIPS ITC is generally equal to 25% of the basis of any qualified property that is part of an eligible taxpayer’s advanced manufacturing facility if the qualified property is placed in service after December 31, 2022, and covers construction occurring after the enactment of the CHIPS and Science Act on August 9, 2022.

“The Biden-Harris Administration’s economic agenda is onshoring semiconductor manufacturing and driving U.S. innovation in this critical industry,” said Secretary of the Treasury Janet L. Yellen. “Semiconductors are vital to ensuring a stable supply of low-cost consumer goods and our investments continue to strengthen those supply chains, create good-paying jobs, and safeguard our national security.”  

“Today represents an important milestone in the implementation of President Biden and Vice President Harris’ historic CHIPS and Science Act,” said U.S. Secretary of Commerce Gina Raimondo. “The Advanced Manufacturing Investment Tax Credit, when paired with CHIPS direct funding and loans, provides a comprehensive set of federal incentives to drive the significant investment in semiconductor manufacturing capacity occurring in the United States important to meeting our national and economic security needs.”

“Today’s final guidance provides critical certainty for semiconductor and solar manufacturers to make generational investments in communities across the country,” said National Economic Advisor Lael Brainard. “Semiconductor investments are supporting over 125,000 jobs and will ensure that the United States leads the world in advanced manufacturing not just for the next few years, but for the next few decades.”

The CHIPS ITC is strengthening the resilience of the semiconductor supply chain and creating good-paying American jobs by incentivizing investments in U.S. facilities that manufacture semiconductors (including wafer production) or semiconductor manufacturing equipment. The CHIPS ITC, along with the $39 billion in CHIPS for America funding administered by the U.S. Department of Commerce (Commerce), is an integral part of the suite of incentives to achieve the Biden-Harris Administration’s economic and national security goals. 

Treasury and Commerce have coordinated closely to make sure these incentives – including the national security guardrails – work together. For example, throughout the development of the final rules, Treasury and the IRS coordinated with Commerce and the Department of Defense to align the final rules in a way that is consistent with Commerce’s national security guardrails rule for CHIPS for America funding (15 C.F.R. part 231). 

The CHIPS ITC final rules announced today are largely in line with proposed regulations released in March 2023 while providing certain modifications to the proposed rules to give taxpayers clarity and certainty. For example, the final rules provide additional clarity on the definition of what constitutes an “advanced manufacturing facility,” including clarifying the inclusion of semiconductor wafer production in the definition of semiconductor manufacturing.

The final rule clarifies that semiconductor wafer production includes the production of wafers used for photovoltaic solar energy generation. Treasury and IRS, with the Department of Energy and other agencies, continue to evaluate additional options to further the Administration’s goal of incentivizing domestic production of the full solar supply chain, including solar wafers.

About CHIPS for America and the CHIPS and Science Act: 

CHIPS for America has allocated more than $36 billion in proposed funding across 20 states and proposed to invest billions more in research and innovation, which is expected to create over 125,000 jobs. Since the beginning of the Biden-Harris Administration, semiconductor and electronics companies have announced over $400 billion in private investments, catalyzed in large part by public investment. CHIPS for America is part of President Biden and Vice President Harris’s economic plan to invest in America, stimulate private sector investment, create good-paying jobs, make more in the United States, and revitalize communities left behind. CHIPS for America includes the CHIPS Program Office, responsible for manufacturing incentives, and the CHIPS Research and Development Office, responsible for R&D programs, that both sit within the National Institute of Standards and Technology (NIST) at the Department of Commerce. Visit https://www.chips.gov to learn more.

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As Prepared for Delivery

Let me thank the IMF and the World Bank for hosting these meetings and all of you for attending today.

I’d like to start by stepping back and speaking about how far we’ve come. Three years ago when I attended my first Annual Meetings as Treasury Secretary, the COVID-19 pandemic was raging. Many of the events were virtual. The IMF had just revised downward its projections for global economic growth due to continued supply chain disruptions and new COVID variants.

Today, the situation is very different. Though progress across economies has been uneven, the global economy has proven resilient. America’s strong economic performance is leading the way as a key engine of global growth. At home, thanks to the Biden-Harris Administration’s economic agenda, we went from millions having lost their jobs to a historic labor market recovery. Unemployment is near all-time lows and U.S. real wage growth has outperformed that of most other advanced economies. U.S. economic growth has also been almost twice as fast as most other advanced economies this year and last, even as inflation came down sooner. As a recent Brookings analysis puts it, “the U.S. is significantly outperforming its peers.” We’re now working to sustain this momentum, including through major investments in infrastructure, advanced manufacturing, and clean energy that other countries have sought to emulate. This morning the IMF again upgraded its forecast for the U.S. outlook, as it did in 2023, when U.S. growth ultimately came in at almost double the IMF’s projection earlier that year.

Our Administration has also been focused beyond our borders. From day one, we rejected isolationism that made America and the world worse off and pursued global economic leadership that supports economies around the world and brings significant benefits to the American people and the U.S. economy.

We will further this approach this week, including by together continuing to respond to global conflicts. For more than two years, the coalition we formed in the immediate aftermath of Russia’s invasion of Ukraine has stood strong. Our novel price cap on Russian oil has restricted Russia’s revenues while keeping global energy markets well-supplied. We continue cracking down on Russian sanctions evasion, and as soon as next week we will unveil strong new sanctions targeting those facilitating the Kremlin’s war machine, including intermediaries in third countries that are supplying Russia with critical inputs for its military. We have also been working tirelessly to unlock the economic value of the Russian sovereign assets immobilized in our jurisdictions to support Ukraine.

The United States is also using all the tools at our disposal in response to the conflict in the Middle East. We have worked to hold the Iranian regime accountable for its destructive behavior across the region by sanctioning terrorist actors including Hamas, the Houthis, and Hezbollah, with over 1,000 Iran-related sanctions since 2021 and multiple rounds of designations in recent weeks. Earlier this month, we took additional decisive action to intensify pressure on Iran in response to Iran’s attack on Israel, expanding sanctions to target Iran’s efforts to channel revenues from its energy industry to finance deadly activities.

And we are more broadly focused on doing what we can to increase stability in the region, including by working to ensure that legitimate aid flows reach Gaza, imposing sanctions on Israeli violent extremist settlers, and pressing Israel to maintain vital correspondent banking relationships with Palestinian banks. We look forward to the Israeli cabinet extending the waivers to preserve correspondent banking relationships for banks in the West Bank by the end of the month deadline to support economic stability in the West Bank.

This week, we’ll maintain our focus not only on taking decisive action in response to conflicts, but also on addressing challenges that threaten to hold back global growth, such as emerging markets and developing countries facing significant debt vulnerabilities and a desperate need for investments in infrastructure and clean energy.

One of many devastating impacts of Russia’s war on Ukraine has been the spike in food insecurity, so we worked with partners to support the launch of the International Financial Institution Action Plan to Address Food Insecurity and have seen it deliver results. IFIs increased lending to the food and agriculture sector by 60 percent following Russia’s invasion and maintained that level of support through 2023. We now affirm President Banga’s commitment to reduce hunger and generate jobs by increasing investment in food systems and will continue to work with the IFIs to move this work forward.

To strengthen health systems, as the current mpox outbreak underscores remains urgent, we continue to support the Pandemic Fund, which has now allocated funding to projects in more than 40 countries across all regions.

Confronting climate change of course also remains at the top of our agenda. The MDBs committed a record high of nearly $75 billion in climate finance to low- and middle-income countries in 2023, a 45 percent increase from 2021, and are deploying new tools to help countries respond to crises and increase resilience. We will continue to work to make climate finance easier to access and to support additional private capital mobilization at the MDBs and through the climate and environment trust funds. There, we should turn to implementing the recommendations of the recently finalized review of the climate finance architecture that we worked with G20 partners to launch.

And we’ve made significant progress putting conflict and fragility, pandemics, and climate change at the core of the MDBs’ work through the Evolution agenda. The MDBs have responsibly stretched their balance sheets and pursued innovative financial measures that will enable $200 billion in additional lending capacity over the next ten years. And as of July, the G20 estimates that measures that have already been identified could enable an additional almost $160 billion. This nearly $360 billion in total would be an annual increase of over 20 percent compared to 2023.

Let me end by emphasizing that all of the investments we make—in food security, global health, climate, and more—won’t deliver results if many low- and middle-income countries are devoting more resources to debt service than to spending on development priorities. We’ve made progress to strengthen our institutions to address these issues. We reached a historic agreement on a 16th General Review of Quotas at the IMF, which will increase IMF quotas by 50 percent so that it can continue playing its crucial role at the center of the global safety net, and approved capital increases at the EBRD and IDB Invest.

But we need to do more. As we look ahead, our Administration will keep pushing to further improve the Common Framework to quickly get support to countries in debt distress; calling for an IDA replenishment with a financing package and policy priorities that meet the needs of low-income countries; and implementing the Nairobi-Washington Vision that President Biden and President Ruto launched in May so that countries with strong policy frameworks facing liquidity stress receive the financing support they need to realize their sustainable development ambitions.

Many of the challenges we face cannot be solved overnight. But I am convinced that the sustained American economic leadership and engagement with partners we first restored and then strengthened over the past three and a half years will be indispensable as we move forward. I look forward to furthering this approach this week as we celebrate the 80th anniversary of the Bretton Woods institutions.

Thank you, and I will now take your questions.

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As Prepared for Delivery 

Two years ago on the eve of the Annual Meetings, I called for the evolution of the multilateral development banks. Today, I am glad to be here with President Banga, Lord Malloch-Brown, and Minister Musokotwane to lay out what we’ve achieved and to reaffirm our commitment to sustaining momentum.

I called for evolution because, as we began to exit COVID recessions around the world, I and many others saw that the stakes were high. There had been insufficient progress or troubling reversals on many of the Sustainable Development Goals. And we faced urgent global challenges that could quickly unravel hard-earned development gains and diminish prospects for the future: from climate change, to pandemics and other global health emergencies, to fragility, conflict, and violence.

I also had a strong conviction about the vital role that the MDBs could play at this crucial moment. Over decades, they have responded to their shareholders; built trusted relationships with developing country governments; and developed and deployed a wide range of tools, from financing to policy support to technical assistance. I’ve gotten to see their impact firsthand in my travels as Treasury Secretary, from an education data processing center in India recognized for driving improvements in educational outcomes that I visited with President Banga to a cutting-edge university in Morocco where I marked the one-year anniversary of MDB Evolution during last year’s Annual Meetings. 

I saw, too, however, that the MDBs needed to change to meet the nature, urgency, and scale of today’s challenges. They could focus more on global public goods because achieving development outcomes at the country level is inextricably linked to addressing global challenges. They could better utilize their balance sheets and harness private sector resources. They could act faster and work more as a system.

My call resonated widely because despite a range of perspectives on what exactly was needed, there was overwhelming consensus on the need for change. Very quickly, diverse stakeholders stepped up. President Banga and leaders across the MDB system led. Governments, non-governmental organizations, research institutions, and the private sector became involved, helping shape Evolution and then continuing to support it. Successive G20 presidencies kept MDB reform high on the agenda. Staff across the MDBs bought in and started taking forward the hard work of implementation.

We focused the Evolution agenda on four key areas in need of change: mission, incentives, operational models, and financial capacity. We’ve seen progress in each. The World Bank has a new vision and mission—“To create a world free of poverty on a livable planet”—and regional development banks have shifted missions as well. There are new incentives like updated corporate scorecards that focus the banks on outcomes, impact, and mobilizing private capital. World Bank projects are moving more quickly to approval, and IDB Invest has a new originate-to-share model to bring in private sector investors. We’ve also drastically increased financial capacity. Across the MDBs, responsibly stretching balance sheets and innovative measures will enable $200 billion in new lending capacity over the next decade, with a potential additional nearly $160 billion from other already identified measures. 

Let me provide some examples of what these changes actually mean for countries around the world.

Nineteen countries have adopted a new option that allows them to repurpose World Bank funds for emergency response so that they can better support their citizens in times of crisis. For example, they could shift resources for a long-term infrastructure project to rebuild critical infrastructure after a natural disaster.

Other countries are taking advantage of innovative tools like climate resilient debt clauses. In July, St. Vincent and the Grenadines chose to delay its repayments to the World Bank for two years, freeing up funds to support disaster response when it mattered most.

Making good on lessons learned from the COVID-19 pandemic, improved communication and coordination across the MDBs and with other institutions will enable faster and more effective responses to global health crises. The World Bank is working with the World Health Organization and the G20 Joint Finance Health Task Force to track financing commitments to mpox response so that resources can be connected to needs. And the Bank, the IMF, and the WHO have just announced how they will jointly help countries access Resilience and Sustainability Trust resources to close pandemic preparedness gaps.

Outside of crisis contexts, countries are increasingly addressing the underlying drivers of fragility and conflict, such as in the case of an African Development Bank loan to the Democratic Republic of Congo to invest in increasing agricultural productivity in communities that had been displaced.

Efforts to drive private capital mobilization are also starting to yield results. New data from the Global Emerging Markets Risk Database enabled an investment fund focused on the SDGs and climate finance to attract over $1 billion in financing, including from a major Dutch pension fund. The World Bank’s push to mitigate foreign exchange risk through more local currency lending is leading to projects like a $200 million financing package for a telecommunications company in Senegal that will help increase digital connectivity. And the Asian Development Bank’s placement of more private sector-focused staff in country offices will facilitate identifying new opportunities for private sector engagement.

Taking inspiration from these and many other examples, we will keep moving Evolution forward this week and in the coming months. The SDGs challenge us to eradicate extreme poverty, strengthen health systems, and protect the planet. President Banga has set ambitious goals, such as to work with the African Development Bank to bring electricity to 300 million people in Sub-Saharan Africa by 2030.

To meet these goals and deliver enduring change, we need to double down on implementation. This includes strengthening partnerships in the context of fragility, conflict, and violence and embedding new ways of working to achieve climate outcomes and increase pandemic preparedness. We must also maintain focus on increasing private capital mobilization and using capital as efficiently as possible.

The work ahead isn’t just for the MDBs to undertake. Shareholders must also play active roles. This is why the United States strongly supported capital increases for the EBRD and IDB Invest, a callable capital increase for the AfDB, and the largest-ever replenishment of the Asian Development Fund. It is also why we now intend to do all we can to deliver a robust policy and financial package for the upcoming IDA replenishment.

We cannot turn back. Eighty years ago at Bretton Woods we created institutions that have shaped development outcomes around the world. Today, the MDBs are the best option for high-quality and transparent development financing at the scale we so desperately need. But the world has changed, and it’s incumbent on each generation to make sure these institutions change with it.

I’ve been honored to be part of delivering on that charge over the past two years. And I believe that the work we’ve done and will continue to do will endure long after I and those here leave our current roles—through better, bigger, and more effective institutions that meet today’s most pressing challenges and pave the way for better outcomes for decades to come.

Thank you.

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