Lower cost
FX hedging pathway
Long-tenor
facility design model
Global capital
readiness for climate projects
Challenge
Many climate projects in India face barriers in accessing foreign financing because FX hedging is expensive, long-tenor instruments are limited, and the foreign borrowing ecosystem is not designed around long-duration climate capital.
FX Smart Intervention
FX Smart supported a strategic initiative to identify structural barriers to climate finance and design market-based as well as policy-oriented mechanisms that reduce currency-risk friction for international capital.
Solution Implemented
- Developed policy recommendations to strengthen the ECB framework for climate-aligned borrowing.
- Designed a dedicated multi-stakeholder FX hedging facility with a layered risk-sharing capital structure.
- Evaluated a GIFT City-based implementation model to support global participation and long-tenor execution flexibility.
Expected Impact
- Reduction in FX hedging costs for climate investments.
- Improved bankability of long-tenor infrastructure projects.
- Greater participation from global investors and climate finance institutions.
- Enhanced access to international capital for renewable energy and sustainable infrastructure projects.
LinkedIn Post
This story was also highlighted in the original climate finance stakeholder update.
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