TCX (The Currency Exchange Fund) provides currency hedges to lenders in frontier markets so they can offer loans in local currency. Projects usually access it through their lender rather than directly.

Is local-currency debt always more expensive?

The nominal rate is higher, but once expected devaluation is priced in it is often comparable or cheaper, and it removes the risk of default from a currency shock.

Local-currency debt and FX risk for projects in emerging markets

231 matching capital sources on the AESFIP database · Last checked October 2026

Hard-currency debt is often the cheapest headline rate and the most expensive outcome. When a project earns in local currency and borrows in dollars or euros, a devaluation can wipe out the equity — a pattern seen repeatedly across African and Asian markets.

This guide explains the routes to local-currency finance: DFI credit lines on-lent by local banks, local-currency lending by development banks, partial credit guarantees that let domestic lenders extend tenor, and hedging providers that swap hard-currency loans into local currency.

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Ask iSustain Advisor Live about local-currency finance and FX risk for your country, sector, stage and ticket size. The question is pre-filled — just add your project details.

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Four routes to reduce currency mismatch

Each route moves FX risk to a party better able to hold it.

Local-currency loans from domestic banks backed by DFI credit lines or risk-sharing.
Partial credit guarantees that let local pension funds and banks lend longer in local currency.
Currency swaps and hedges from specialist providers, typically arranged by the lending DFI.
Tariff indexation in the offtake contract, where regulation allows it.

What lenders ask for

Expect to show revenue currency, tariff or PPA indexation terms, debt service coverage under devaluation scenarios, and why the chosen route is cheaper on an all-in, hedged basis.

The funders

Each profile shows mandate, instruments and sector appetite. Verified contacts and application routes are available to members.

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Showing 24 of 231 matching capital sources. The remaining 207 — including their verified routes, ticket sizes and eligibility criteria — are reserved for members.

Get matched shortlist for your project

Knowing a funder's name is only 10% of the battle. iSustain Advisor Live finds the best-fit financiers and instruments for your project, the clearest route in, and how to approach them — based on your country, sector, stage and capital requirement.

Common questions

What is TCX?: TCX (The Currency Exchange Fund) provides currency hedges to lenders in frontier markets so they can offer loans in local currency. Projects usually access it through their lender rather than directly.
Is local-currency debt always more expensive?: The nominal rate is higher, but once expected devaluation is priced in it is often comparable or cheaper, and it removes the risk of default from a currency shock.