Category: CD Group Companies

The Currency Exchange Fund (TCX), a Cardano Development group company is pleased to announce its partnership with REEEP to help support local currency financing of clean energy SMEs in developing countries.

Ruurd Brouwer, TCX’s CEO: “TCX very much welcomes REEEP’s initiative to work with us to promote sustainable local currency finance for clean energy SMEs in developing countries. We believe this is a vital building block for establishing a long-term resilient energy sector”.

‘’REEEP and TCX have a common objective’’ says Magdalena Kouneva, Director General of REEEP, “We are looking forward to joint activities with TCX to raise awareness in the sector and enable solutions.’’

We share the goal of promoting access to modern, clean energy systems and services to foster a sustainable energy market in developing countries under a local currency framework. In cooperation with other industry actors, REEEP and TCX will develop and implement facilities targeting international lenders to ensure local currency is provided to local financial institutions and/or directly to clean energy SMEs. Final beneficiaries will be projects and companies in sectors such as smart cities, cross-sector systems (including knowledge management and agri-food value chains), and energy access and rural electrification in developing countries.

Through the partnership, REEEP and TCX will cooperate with international donors, developmental financial institutions, investors and local financial institutions within their networks.

Cardano Development’s money markets development company Frontclear has launched its on-line training platform: Frontclear Academy. The Frontclear Academy is a global facility where Ugandan and Ghanaian users have gained access to more than 10 conceptual and operational courses on knowledge and skills relevant to money and interbank markets.

The development of EMDC money markets and secondary bond markets, are going into high gear. Many countries are decisively taking on more conducive legal & regulatory frameworks including passing netting regulation as well as developing much needed market infrastructure. The knowledge of banks’ staff and wider regulators in these markets, needs to keep pace with the developments. The Frontclear Academy offers markets like Uganda and Ghana, the opportunity to continually learn in a world having shifted on-line. Frontclear has been providing on-site training to EMDC market participants since 2016. With the conviction that training is a key component to money market development, the Frontclear Academy offers continuity amidst COVID-19 related travel restrictions.

“The current course offering speaks directly to conceptually understanding the foundation of money markets to the practical skills required to operationalize a trade. We are excited to have opened the Academy to the Ugandan market and look forward to doing the same shortly in Ghana and other markets.” – Ingrid Hagen, Vice President Strategic Projects at Frontclear

Frontclear Academy Uganda press release.

Frontclear Academy Ghana press release.

The Currency Exchange Fund (TCX), a Cardano Development company has announced that the European Commission (EC), with the support of KfW, the International Finance Corporation (IFC) on behalf of the International Development Association (IDA) and Proparco invested over USD 200 million in the Fund.

These investments significantly raise TCX’s risk bearing capacity and are a clear sign of the commitment and resolve of these investors to strengthen the resilience of borrowers in frontier and emerging markets by offering them protection against currency risk.

Signing celebration ‘Scaling Up Resilience Against Currency Risk’ from TCX on Vimeo.

Read the press release.

With COVID-19 effecting global markets worldwide ILX Fund have released a thought leadership series on the effects of COVID-19 on emerging markets…

January 2020. Frontclear arranged and structured a USD single-digit millions AZN/USD non-deliverable forward (NDF) transaction with Unibank Commercial Bank OJSC (Unibank). This transaction has made it possible for Unibank to effectively convert their USD liabilities into AZN liabilities, allowing for Unibank to provide additional opportunities for local currency financing to its clients. The NDF transaction is documented under an International Swap and Derivatives Association (ISDA) Agreement, whereby Frontclear customized the confirmation to overcome legal issues in the Azerbaijani market.

After the double devaluation of the Manat in 2016, the banking system went through several years of turmoil. Access to foreign direct investment was significantly constrained. 2019 marked a cornerstone for the Azeri banking sector. Banks willing to respond to a recovering market and increased credit growth, faced multiple challenges. Credit, legal and operational risks made it an issue for Azerbaijani banks to access global capital markets while simultaneously they were confronted by difficulties matching assets and liabilities and a growing need for currency hedging solutions.

The transaction helped to further clarify certain legal issues related to close-out netting in Azerbaijan, which were mitigated by effective Frontclear deal arranging and structuring. Frontclear is already planning further technical assistance in Azerbaijan, including a seminar Money Market Matters. The latter gives regulatory and market participants a detailed overview of the structure and functions of a stable and inclusive money market. The session will address key system issues preventing Azerbaijani banks from accessing global funding and will be followed-up by practical market trainings.

“We are proud to execute our first transaction in Azerbaijan and the key role we have played in originating the structure that allowed the Azerbaijani bank to access the off-shore NDF market. The transaction strengthens global markets players’ ability to mitigate legal risks in the country and sets a benchmark for the development of Azerbaijan’s money markets going forward.”

Andrei Shinkevich, Senior VP Frontclear.

Chairman of the Management Board of Unibank CB Faig Huseynov stressed that the partnership with the prestigious Frontclear and TCX will create new opportunities for the bank’s customers:

“We are very pleased that the NDF transaction will open up new opportunities for financing local business, which is one of the important targets in Unibank’s strategy. This agreement will provide more opportunities to provide our corporate clients with profitable and non-risky financial resources. Thus, Unibank will be able to increase its support for the development of the real sector.”

Faig Huseynov, Chairman, Unibank CB.

“We are pleased with the Frontclear partnership that enabled TCX to offer an additional way for Unibank to swap its USD liabilities into AZN, enabling Unibank to meet the demand of its customers for Manat funding. TCX is also a beneficiary of this partnership as the Fund did not have the credit appetite to face Unibank or leapfrog currency derivatives from a legal perspective. As Frontclear has diligently covered the credit & legal risk aspects it opens avenues for TCX to venture into direct relationships with more comfort in the future to service the long term relationship of the Fund.”

Jerome Pirouz, Senior VP Structuring, TCX.