The African Development Bank Group’s Board of Directors has approved an equity investment of USD 25 million in The Currency Exchange Fund (TCX), a global leader in providing long-term local currency hedging solutions in emerging and frontier markets. This investment will strengthen TCX’s capital base, expand its risk-bearing capacity, and increase its ability to offer hedging instruments in illiquid and less liquid currencies across Africa. It is expected to help borrowers mitigate foreign exchange risks, particularly in fragile states and underserved markets where hedging options are limited or unavailable.
By supporting TCX, the Bank aims to reduce the mismatch between debt obligations and local revenue streams, enhance Africa’s integration into global capital markets, and attract additional development finance institutions and private investors. The move underscores AfDB’s commitment to providing innovative financing solutions to deepen African capital markets and reduce the root causes of debt distress.
The investment builds on the Bank’s prior collaboration with TCX and reflects confidence in its impact-driven model. To date, TCX has hedged over USD 17 billion globally, including USD 4 billion across 31 African countries. The fund has played a vital role in fragile and low-income states, where around 18% of its portfolio is concentrated. AfDB’s participation will also support priority sectors such as public debt management, infrastructure, energy access, microfinance, and SME development.
Leaders from both institutions highlighted the importance of the partnership. Ahmed Attout, AfDB’s Director of Financial Sector Development, emphasized the role of the investment in unlocking local currency financing and advancing the Bank’s broader capital markets strategy. TCX CEO Ruurd Brouwer welcomed AfDB as a key partner in shielding borrowers from currency risks while advancing African capital market development.
This operation aligns with the AfDB’s Ten-Year Strategy 2024–2033 and complements initiatives such as local currency bond issuance, Partial Credit Guarantees, and private sector financing. By enhancing access to local currency finance, the investment is expected to generate significant development impact, promote financial resilience, and foster inclusive and sustainable growth across Africa.
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