AfDB Injects USD 25 Million into TCX to Curb Africa’s Currency Risks
The African Development Bank Group (AfDB) has approved an equity investment of USD 25 million in The Currency Exchange Fund (TCX) to expand access to local currency financing across Africa.
The investment will strengthen TCX’s capital base, increase its risk-bearing capacity, and enable greater provision of hedging instruments in illiquid and underdeveloped currency markets. The move aims to mitigate foreign exchange risks faced by African borrowers, particularly those in fragile states and underserved markets.
TCX, a development-focused fund, provides tailor-made foreign exchange hedging solutions that support local currency lending in countries where conventional hedging markets are limited or non-existent. Since its inception in 2007, TCX has hedged more than USD 17 billion globally, including over USD 4 billion across 31 African countries.
Ahmed Attout, Director of the Financial Sector Development Department at AfDB, said the transaction was a milestone in addressing structural financial challenges: “This investment in TCX marks an important milestone in the Bank’s effort to deepen African capital markets and address the root causes of debt distress. The Bank’s support will unlock local currency financing for MSMEs, infrastructure and many sectors across Africa.”
Ruurd Brouwer, Chief Executive Officer of TCX, welcomed the partnership, noting: “We are thrilled to welcome the African Development Bank Group to TCX’s capital base. 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.”
The initiative aligns with the Bank’s Ten-Year Strategy (2024–2033) and complements wider efforts to promote local capital markets, including support for bond issuance, partial credit guarantees, and private sector lending in local currency.
With 18% of its portfolio already concentrated in fragile and low-income countries, TCX is expected to scale up its work in critical sectors such as energy access, infrastructure, debt management, and SME development.
The AfDB, a founding member of TCX, said the partnership would contribute to building resilient financial systems, reducing reliance on foreign-denominated debt, and promoting inclusive, sustainable growth across the continent.
