ABIDJAN, Ivory Coast, September 18, 2025/APO Group: The African Development Bank Group has approved an equity investment of USD 25 million in The Currency Exchange Fund (TCX), a global leader offering long-term local currency hedging solutions in emerging and frontier markets.
This strategic investment aims to bolster TCX’s capital base, enhance its risk-bearing capacity, and expand its ability to offer hedging instruments in illiquid and less liquid currencies across the African continent. The transaction is designed to help mitigate the foreign exchange risks faced by borrowers in Africa, particularly those operating in fragile states and underserved markets.
TCX operates as a development-focused fund that provides tailor-made FX hedging instruments to enable local currency lending in countries where conventional hedging markets are either underdeveloped or non-existent. The Bank’s investment will crowd in additional DFIs and private investors, reinforce Africa’s integration into global capital markets, and support sustainable growth by reducing the mismatch between debt currency and revenue for local borrowers.
Director of the Financial Sector Development Department, Ahmed Attout, at the African Development Bank Group, commented: “This investment in TCX marks an important milestone in the Bank’s effort to deepen African capital markets while at the same time, tackle the root causes of debt distress. The Bank’s support to TCX will unlock local currency financing for MSMEs, infrastructure, and many sectors across Africa.” He added: “The transaction forms part of the Bank’s broader objective to promote access to adequate financing through innovative alternative solutions.”
The investment builds on the Bank’s prior participation in TCX and reflects its continued confidence in the fund’s track record and impact-driven model. TCX has hedged more than USD 17 billion in notional amounts since inception, including an excess of USD 4 billion across 31 African countries. The Bank’s participation is expected to facilitate increased hedging volumes in priority sectors, including the public sector (Debt Management Offices and Public Development Banks), infrastructure, energy access, microfinance, and SME development. TCX also plays a unique role in fragile and low-income countries, with around 18 percent of its global outstanding portfolio currently focused on such markets.
TCX’s Chief Executive Officer, Ruurd Brouwer, stated: “We are thrilled to welcome the African Development Bank Group to TCX’s capital base, joining fellow development finance institutions, impact investors, and governments that support our local currency hedging solution. It marks the start of a close partnership in protecting AfDB’s public and private sector borrowers from currency risk and promoting the development of African capital markets. We very much look forward to increasing our joint impact on the continent.”
This operation is aligned with the Bank’s Ten-Year Strategy 2024–2033, where it complements the Bank’s broader capital markets strategy, which includes support for local currency bond issuance, Partial Credit Guarantees, and private sector local currency lending, while at the same time, the investment is expected to deliver a strong development impact.
The African Development Bank remains committed to fostering resilient capital markets in Africa, supporting de-risking mechanisms for the private sector, and expanding access to local currency finance to promote inclusive and sustainable development.
