African Development Bank Approves Equity Investment in The Currency Exchange Fund to Support Access to Local Currency Financing across Africa

(MENAFN- News.Africa-Wire) ABIDJAN, Ivory Coast, September 18, 2025/ -- The Board of Directors of the African Development Bank Group () has approved an equity investment of USD 25 million in The Currency Exchange Fund (TCX), a global leader in offering long-term local currency hedging solutions in emerging and frontier markets.

This strategic investment will strengthen T’X’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 will 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 ’ank’s investment will crowd in additional DFIs and private investors, reinforce ’frica’s integration into global capital markets, and support sustainable growth by reducing the mismatch between the currency of debt and revenue for local borrowers.

Ahmed Attout, Director of the financial Sector Development Department, at the African Development Bank Group, “tated: “This investment in TCX marks an important milestone i’ the Bank’s effort to deepen African capital markets and address the root causes of debt distress. The Bank’s support to TCX will unlock local currency financing for MSMEs, infrastructure and many sectors across Afric”.” He adde“ : “The transaction forms part of th’ Bank’s broader objective to promote access to adequate financing through innovative alternative so”utions.”

The investment builds o’ 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 over USD 4 billion across 31 African count’ies. The Bank’s participation is expected to facilitate increased hedging volumes in priority sectors such as the public sector (Debt Management Offices and Public Dev lopment Banks), infrastructure, energy access, microfinance, and SME development. TCX also plays a unique role in fragile and low-income countries, with around 18% of its global outstanding portfolio currently focused on such markets.

R’urd Brouwer, TCX’s Chief Executiv“ Officer stated : “We are thrilled to welcome African Developm’nt 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 partner’hip 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 operati’n is aligned with the Ba–k’s Ten-Year Strategy 2024⦣8217;2033. 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.

The investment is expected to deliver 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.
Distributed by APO Group on behalf of African Development Bank Group (AfDB).

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