Release date: 17 October 2014
Promoter – Financial Intermediary
PUBLIC ENTITY(IES)Location
Description
An equity investment by the EIB in TCX, a fund that provides derivatives to international financial institutions and their emerging market clients in order to hedge the currency and interest-rate mismatches inherent in their transactions.
Objectives
The EIB’s objective in becoming a shareholder in TCX is twofold:
a) to broaden and deepen the access to local currency financing by the Bank’s clients, mainly with the aim to improve the availability and reliability of long-term lending to small and medium-sized enterprises (SMEs) and extending the reach of local-currency lending to more risky and difficult countries. The availability of long-term funding in local currency for local companies eliminates an important source of risk and reduces the cost of capital, which, in turn, contributes to their long-term financial sustainability.
b) to assist financial intermediaries to strengthen their balance sheets by avoiding mismatches between the short-term nature of local deposits and long-term maturities of loans. This, in turn, contributes to creating more robust financial markets and contributes to the growth potential of beneficiary countries.
By improving access to local-currency finance for micro, small and medium enterprises (MSMEs), the project will promote more inclusive and balanced economic growth in ACP countries in line with the objectives of the Cotonou Agreement. The operation will contribute to the diversification of the product offering proposed by the EIB to develop MSME financing in ACP countries. TCX has a stated focus on Sub-Sahara African countries where a maximum development impact may be obtained.
Sector(s)
Proposed EIB finance (Approximate amount)
EUR 40 million
Total cost (Approximate amount)
EUR 520 million
Environmental aspects
To ensure that its business operations do not support unsustainable investments and activities, TCX incorporates environmental and social standards in its due diligence process and has a published sustainability policy (TCX E&S Guidelines 2014) which it adheres to. TCX makes an assessment of its counterparties’ environmental and social policy frameworks and management systems, and bases itself on the IFC Performance Standards for the purpose.
Procurement
Not applicable
Status
Signed - 20/03/2015
Disclaimer
Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The information and data provided on this page are therefore indicative.
They are provided for transparency purposes only and cannot be considered to represent official EIB policy (see also the Explanatory notes).