Advancing clean energy access
In 2025, the German Federal Ministry for the Environment, Climate Action, Nature Conservation and Nuclear Safety (BMUKN, formerly BMWK) provided €3.45 million through KfW to establish a blended finance facility that reduces the pricing of local currency hedging for clean energy projects in emerging and frontier markets. This facility builds on a long-standing partnership between TCX and BMUKN to support Sustainable Energy for All (SE4ALL)* objectives and advance Sustainable Development Goal 7, which aims to ensure access to affordable, reliable, sustainable, and modern energy for all by 2030.
The facility uses an auction-based allocation mechanism where projects compete for subsidies, with those requiring less subsidy prioritized first. This ensures efficient use of limited resources by directing funds where they create maximum development impact. The subsidy is integrated directly into the hedge pricing and ultimately into the financing interest rate, making local currency affordable for clean energy projects.
Geographic coverage follows TCX’s countries of operations and respects the Fund’s additionality principle. Eligible projects include on-grid and off-grid renewable energy, solar home systems, enterprises in the renewable energy sector, financial institutions financing renewable energy providers, and projects providing access to clean cooking solutions.
As of December 2025, TCX has executed eight trades under this facility, utilizing $1.48 million of subsidy to mobilize $17.92 million, resulting in a 12:1 leverage ratio. These projects support borrowers in Kyrgyzstan, Armenia, Uganda, Zambia, and Kenya across a range of sectors including microfinance, solar pay-as-you-go systems, agriculture, and green bond deployment. While early-stage, the facility demonstrates how auction-based mechanisms can efficiently allocate scarce concessional resources to maximize development impact in clean energy finance.
*Sustainable Energy for All (SE4ALL) is a global initiative launched by the UN Secretary-General to achieve universal energy access, double the rate of improvement in energy efficiency, and double the share of renewable energy in the global energy mix by 2030