Currency Exchange Fund

The Currency Exchange Fund (TCX) is designed to mitigate currency and interest rate risks in order to attract and lock in long-term private equity and private debt in local currency. Through these risk mitigation instruments, the TCX intends to enable and scale climate change mitigation investments. For selected regions, the TCX investment management company offers the following instruments to beneficiaries that are investing in climate change mitigation and adaptation projects:

• Interest rate swaps
• Long-term fixed cross-currency swaps
• Inflation-linked cross-currency swaps

Usually, TCX collaborates with the International Finance Corporation (IFC) to enter into joint transactions for a pipeline of projects. The IFC complements the risk mitigation instruments of TCX by taking over credit risks. TCX is one of the initiatives incubated and launched by the Climate Finance Lab and is funded by the Dutch and German Governments as well as several development finance institutions.

Infrastructure projects that contribute to climate change mitigation, such as renewable-energy and energy-efficiency projects.

The TCX initially focused on African countries but is now offering the instrument globally to most emerging and developing countries.

• Size of coverage: Currency hedges in India are between USD 150 million and 300 million
• Tenor of coverage: Minimum of seven and up to 30 years
• Currencies: Currency hedges offered in 70 currencies

https://www.tcxfund.com