ABIDJAN, Ivory Coast, September 18, 2025 – The African Development Bank Group (AfDB) has approved an equity investment of USD 25 million in The Currency Exchange Fund (TCX).
The investment aims to strengthen TCX’s capital base, increase its risk-bearing capacity, and expand access to hedging instruments in illiquid and less liquid African currencies.
This strategic partnership underscores AfDB’s commitment to mitigating foreign exchange risks for African borrowers, particularly in fragile states and underserved markets, while supporting sustainable economic growth across the continent.
Expanding Access to Local Currency Financing in Africa
TCX operates as a development-focused fund, providing customized FX hedging instruments to enable local currency lending in markets where conventional hedging mechanisms are underdeveloped or non-existent.
By partnering with TCX, the African Development Bank is fostering deeper capital market integration and enhancing access to local currency financing in Africa for both public and private sector borrowers.
Ahmed Attout, Director of the Financial Sector Development Department at AfDB, highlighted the importance of this move:
“This investment in TCX marks a significant milestone in our effort to deepen African capital markets and address the root causes of debt distress.
Our support will unlock local currency financing for MSMEs, infrastructure, and other critical sectors across Africa.”
He further noted that this initiative complements the Bank’s broader strategy to provide innovative financing solutions to enhance financial resilience across the continent.
TCX’s Role in Advancing African Capital Markets
Since its establishment in 2007, TCX has hedged more than USD 17 billion in notional amounts, including over USD 4 billion in 31 African countries.
The fund’s expertise in offering long-term hedging solutions has been pivotal in supporting sectors such as infrastructure, energy, microfinance, and SME development.
Ruurd Brouwer, TCX CEO, emphasized the impact of the AfDB investment:
“We are thrilled to welcome the African Development Bank Group to TCX’s capital base.
This partnership will protect public and private sector borrowers from currency risk and support the development of African capital markets.
Together, we aim to significantly increase access to local currency financing in Africa.”
Approximately 18% of TCX’s global portfolio is currently focused on fragile and low-income countries, demonstrating its commitment to addressing market gaps in challenging environments.
Strategic Alignment with AfDB’s Ten-Year Strategy
The $25 million investment aligns with AfDB’s Ten-Year Strategy 2024–2033, complementing broader initiatives such as local currency bond issuance, Partial Credit Guarantees, and private sector local currency lending.
By enhancing TCX’s hedging capacity, the Bank expects to stimulate additional investments from other development finance institutions and private sector investors, further advancing financial inclusion and market stability across Africa.
Development Impact and Future Outlook
The AfDB’s equity participation in TCX is expected to deliver significant development impact by reducing currency risk, expanding access to local currency financing in Africa, and fostering resilient capital markets.
This initiative will particularly benefit MSMEs, infrastructure projects, and other sectors that rely on stable and predictable local currency financing.
As the African Development Bank continues to drive innovative financial solutions, this partnership with TCX represents a decisive step toward enabling sustainable growth and inclusive development across Africa.
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Media Contact:
Alexis Adélé
Communications and External Relations Department
African Development Bank
[email protected]
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