Please read more in our press release.
European Commission, EDFI Management Company, and TCX Join Forces to Expand Local Currency Financing in Critical Sectors with EFSD+ Support
Seville, 1 July 2025— Today, the European Commission (EC), EDFI Management Company (EDFI MC) and The Currency Exchange Fund (TCX) signed a Guarantee Agreement up to an amount of EUR 150mn. The Agreement, called the “EU Market Creation Facility – Pricing Component Plus”, will make currency risk hedging more affordable. It is expected to support up to EUR 2bn in financing denominated in local currency to Europe’s partner countries.
The Agreement is supported by the European Fund for Sustainable Development Plus (EFSD+), one of the main financing tools of Global Gateway, promoting sustainable investments in partner countries. It reflects the EU’s strong commitment towards inclusive economic prosperity by improving access to local currency financing for borrowers in Sub-Saharan Africa, Asia, Pacific and the Middle East, the European Neighbourhood and the Western Balkans.
Currency risk is a critical risk impacting entrepreneurs, consumers and the public sector in many developing economies and emerging markets. The lack of affordable tools to manage it is a fundamental barrier to increased private sector participation in developing countries. In those markets where volatility, credit concerns or regulatory constraints are particularly high, the costs of TCX’s hedging solutions—which are priced risk-reflectively (i.e. not commercially)—can be prohibitive. This can result in situations where borrowers in the riskiest markets and who most need protection, are often those who can least afford it.
The “EU Market Creation Facility – Pricing Component Plus” will address this issue, building on a highly successful pilot program that closed in 2024 and supported up to EUR 120mn in investments. The first-of-its-kind blended facility is now scaled up to support an additional up to EUR 2bn in investments in critical areas such as renewable energy, sustainable infrastructure and other projects falling under the scope of Global Gateway and Team Europe.
Over a five-year implementation period, the facility is expected to result in more financing denominated in local currency, improved debt sustainability and greater resilience for borrowers and financial systems.
Jozef Síkela, EU Commissioner for International Partnerships, European Commission said: “De-risking development projects is a key part of our Global Gateway strategy. It allows us to mobilise private capital and enhance the impact of our investments. Today’s signature contributes to protecting international lenders and their local borrowers from exchange rate volatility. By enabling more stable and predictable financing in local currencies, it strengthens both the resilience and bankability of our projects.”
Rodrigo Madrazo, CEO of EDFI Management Company stated: “EDFI MC is proud to facilitate this partnership that will allow the European Development Finance Institutions and other like-minded impact investors to address currency risk, a clear deterrent of development financing. This initiative will unlock investment flows where they are needed most.”
Ruurd Brouwer, CEO of TCX :“We are proud to sign this agreement today together with our two key partners. It comes on top of a EUR 250mn commitment from the EC that strengthens TCX’s capital base. The Pricing Component + allows TCX to apply a discount to swap-rates in high-risk markets and extend our reach to borrowers in markets otherwise unaffordable. This makes it a great example of a niche tool with catalytic potential, using scarce donor resources very efficiently.”