Long-Term FX Risk Management
Long-Term FX Risk Management provides tools to address currency and interest rate risk – helping overcome major barriers to investment in renewable energy and climate-relevant projects in developing countries. For context, one in eight developing world currencies fall 20% or more against the dollar in a given year; and one in 20 crash by 50% or more.
Proponents TCX provide a vital currency hedging mechanism, with a portfolio of exposure to almost 60 hard-to-hedge currencies in developing countries, allowing climate-relevant projects to access finance. Many of the projects supported contribute to both climate goals and the SDGs.
Impact
Hedged $240 mn of climate-related investment in 11 countries
Total currency risk managed grew 40% from 2017 to 2018
Examples of supported projects with SDG benefits include:
- M-KOPA, is tackling poverty and access to affordable and clean energy by providing solar home systems to more than 500,000 low-income households in Kenya, Tanzania, and Uganda
- InsuResilience Investment Fund in Georgia, is helping to ensure sustainable cities and communities by providing weather insurance for households that are affected by climate-related extreme weather events