Rabat – The Trade and Development Bank Group (TDB Group) and the Currency Exchange Fund (TCX) have signed today, during the Africa Investment Forum (AIF), an International Swaps and Derivatives Association (ISDA) Master Agreement and Credit Support Annex (CSA) to enhance financial resilience through local currency solutions in Africa.
Leveraging TDB Group’s continental footprint and development finance expertise, and TCX’s specialised capabilities in currency risk management, the agreement will enable the institutions to work together on delivering local currency solutions to both private and public sector players in TDB Member States.
More specifically, TDB Group and TCX will collaborate on trading innovative hedging instruments with the objective to mitigate currency risks and foster sustainable financing in local currencies. This is expected to deepen market development, enhance liquidity, and support corporates and sovereigns in sectors critical to regional growth.
The execution of the ISDA CSA follows the institutions’ earlier Memorandum of Understanding, which laid the groundwork for cooperation on sustainable financing and local currency risk solutions.
Admassu Tadesse, TDB Group President and Managing Director said: “We are pleased to sign this ISDA with TCX to bolster local currency financing in our Member States. Local currency solutions can help ease pressures on countries’ balance of payments, mitigate currency risks and support domestic markets – ultimately supporting macroeconomic stability and reducing systemic vulnerabilities to external shocks.”
Ruurd Brouwer, TCX CEO said: “TCX is very pleased to deepen our partnership with TDB Group through this ISDA agreement. By combining TDB’s regional presence with our expertise in currency risk management, we can deliver practical local currency solutions that help protect TDB’s clients from foreign exchange volatility. This collaboration reflects our shared commitment to strengthening financial resilience across Member Countries and supporting sustainable development financing.”
Recognizing the importance of knowledge transfer, TDB Group and TCX are also committed to offering capacity-building initiatives to ensure clients are well-versed in risk management using derivatives. These programmes include training sessions on derivative instruments and hedging strategies, technical assistance to structure transactions and manage exposures, and knowledge-sharing platforms to promote best practices in financial risk management. TDB Group and TCX recently co-organised alongside other partners a training for African government debt management officers on loan negotiation and foreign currency exchange management.
The International Swaps and Derivatives Association (ISDA) Master Agreements govern derivative transactions between parties in different jurisdictions and transactions involving different currencies.
With this agreement in place, both parties will actively identify eligible transactions and deliver tailored solutions to meet the evolving needs of private and public sector clients in the region served by TDB Group.
About TDB Group
Established in 1985, the Trade and Development Bank Group (TDB Group) is an African regional multilateral development bank, with a mandate to finance and foster trade, regional economic integration, and sustainable development in Africa. TDB Group counts several subsidiaries and strategic business units including Trade and Development Banking, TDB Asset Management (TAM), the Trade and Development Fund (TDF), TDB Captive Insurance Company (TCI), the ESATAL fund management company and TDB Academy.
About TCX
TCX is a development finance initiative that was established with the sole purpose of mitigating currency risk and enabling indexed local currency financing to developing countries. For borrowers, this reduces debt service uncertainty associated with the impact of currency risk and greatly contributes to debt sustainability. TCX offers lenders derivative instruments—cross-currency swaps and FX forwards– in currencies not or insufficiently offered by commercial parties. Founded in 2007, the Fund is supported by an investor base that includes KfW, EBRD, EIB, IFC, FMO, as well as the European Commission and Dutch, Swiss, British, French and German governments, and other impact investors. TCX has hedged a total volume of over USD 18 billion in development loans in 71 currencies.
