The African Development Bank Group (AfDB) has approved a $25 million equity investment in The Currency Exchange Fund (TCX), a global leader in providing long-term local currency hedging solutions for emerging and frontier markets.
The strategic investment is aimed at strengthening TCX’s capital base, enhancing its risk-bearing capacity, and expanding its ability to offer hedging instruments in illiquid and less liquid currencies across Africa.
This move will help mitigate foreign exchange risks faced by African borrowers, particularly those in fragile and underserved markets.
TCX specializes in creating tailored FX hedging instruments that enable local currency lending in countries where conventional hedging markets are either underdeveloped or unavailable. By partnering with TCX, AfDB expects to attract additional development finance institutions (DFIs) and private investors, integrate African markets more deeply into global finance, and reduce the mismatch between debt currency and revenue streams for local borrowers.
Ahmed Attout, director of the Financial Sector Development Department at AfDB, said:
“This investment in TCX marks a significant milestone in the Bank’s effort to deepen African capital markets and tackle the root causes of debt distress. By unlocking local currency financing for MSMEs, infrastructure projects, and other sectors, this partnership brings us closer to achieving inclusive economic growth.”
The investment reflects AfDB’s confidence in TCX’s impact-driven approach. Since its inception, TCX has hedged over $17 billion in notional amounts, including more than $4 billion across 31 African countries.
The Bank’s participation is expected to scale hedging volumes in priority sectors such as public debt management, infrastructure, energy access, microfinance, and SME development. Notably, around 18% of TCX’s global portfolio is already focused on fragile and low-income countries.
Ruurd Brouwer, CEO of TCX, welcomed the partnership:
“We are excited to have the African Development Bank join TCX’s capital base alongside other DFIs, impact investors, and governments. This partnership will help protect AfDB’s public and private sector borrowers from currency risk while advancing the development of African capital markets.”
This operation aligns with AfDB’s Ten-Year Strategy (2024–2033) and complements its capital market initiatives, including local currency bond issuance support, partial credit guarantees, and private sector local currency lending programs.
AfDB says the investment will deliver strong development impact by strengthening Africa’s capital markets, supporting private sector growth, and expanding access to sustainable local currency finance for inclusive development across the continent.
