Foreign exchange hedging facility for renewable energies and energy efficiency in Africa
Fluctuating exchange rates can result in loss of funds inhibiting investments in renewable energy and energy efficiency (4E) in Sub-Saharan Africa. At the same time, the demand for energy and efficient energy is continously increasing in many countries. The multilateral trust fund "The Currency Exchange Fund" (TCX) hedges the exchange rate risks many projects are exposed to. The German Federal Ministry for the Environment provides the TCX with IKI funds through the KfW. This investment does not only provide for risk hedging, but also triggers a double leverage effect of climate financing, because other financing partners contribute to TCX as well. Due to this effective hedge, investors and donors are more willing to finance projects together with utilities and small power providers. The project contributes to mitigating greenhouse gas emissions in Africa by investing in climate-friendly 4E projects and increases financial institutions' confidence in local 4E projects in the long term.
- Countries
- Ghana, Nigeria, Rwanda, Tanzania, Uganda, Zambia
- IKI funding
- 50,000,000.00 €
- Duration
- 11/2015 till 12/2045
- Status
- open
- Implementing organisation
- KfW Entwicklungsbank
- Implementing Partner
-
- The Currency Exchange Fund (TCX) - The Netherlands
- Online
State of implementation/results
- In Malawi, TCX supports sustainable energy access by facilitating a blended-currency loan to Yellow Malawi. This loan enables local currency repayments of a USD investment by Acumen’s H2R initiative, reducing currency risk and helping to expand solar energy access to off-grid communities.
- In Rwanda, TCX collaborates with the AfricaGoGreen Fund to convert an existing US Dollar-denominated loan to Ampersand Energy into Rwandan Francs (RWF). This currency swap, supported by the European Commission, aims to shield Ampersand from currency risk, enhancing financial resilience and supporting the growth of Rwanda’s electric vehicle sector.
- Targeted training of interested parties through online webinars (www.tcxfund.com/…)
- Piloting of a local currency crowdfunding loan via the Platfrom Lendahand in cooperation with TCX (www.tcxfund.com/…)
Latest Update:
04/2026
Project relations
Legend:
The link has been copied to the clipboard
