Landmark Global Gateway Partnership Unveiled to Unlock up to €2 Billion for Local Currency financing in EU Partner Countries
European Commission, EDFI Management Company, and TCX Join Forces to Expand Local Currency Financing in Critical Sectors with EFSD+ Support
Seville, 2 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 afive-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.”
About TCX
TCX is a global development finance initiative supported by a shareholder base that includes FMO, IFC, EBRD, EIB, KfW as well as the European Commission and Dutch, Swiss, British, French and German governments, other DFIs and microfinance vehicles. TCX protects borrowers in emerging and frontier markets from currency risk by hedging development finance lending and transferring the risk to TCX’s balance sheet. TCX offers derivative instruments—cross-currency swaps and FX forwards– in currencies not or insufficiently offered by commercial parties. TCX was founded in 2007 and has since then hedged a total volume of over USD 16 billion in development loans in 66 currencies.
About EDFI MC
EDFI Management Company (EDFI MC) is a multilaterally owned impact asset manager which delivers innovative development finance solutions that enable European DFIs, development banks and private sector investors to increase the scale and impact of their work. The company focuses on business models, technologies and geographies where other investors have not been able to operate at the desired scale given their resources and investment criteria. For more information, visit www.edfimc.eu
About EFSD+ and the Global Gateway
EFSD+ is the EU’s financial instrument supporting investments in partner countries under the Global Gateway strategy, which promotes sustainable and trusted connections in digital, energy, transport, and human capital sectors worldwide. More info: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/stronger-europe-world/global-gateway_en
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Contact
For questions, please contact Sophie Peeters on s.peeters@tcxfund.com.
