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The World Bank has unveiled plans to scale up the use of currency risk hedging instruments as part of efforts to attract more private investment into cross-border railway projects vital to Africa’s regional integration and economic transformation.
World Bank Executive Director, Zeinab Ahmed, said the institution was strengthening its financial toolkit to tackle persistent barriers that have discouraged private sector participation in large-scale infrastructure projects.
Speaking during a ministerial panel on the African Integrated and Cross-Border Bankable Railway Network at the Third Luanda Summit on Financing Infrastructure for Development in Africa, Ahmed highlighted currency volatility as one of the biggest deterrents to investors.
“One of the fundamental barriers to private sector investment in cross-border infrastructure has been currency volatility,” she said, adding, “We are therefore expanding our use of currency risk hedging tools to protect investors and project developers from foreign exchange fluctuations that often undermine returns and project stability.”
Ahmed explained that the instruments formed part of a broader blended finance and risk mitigation framework that the World Bank is deploying to make sovereign loan programmes more attractive to private capital.
By combining concessional and non-concessional funding sources, the Bank aims to lower the overall risk profile of major regional projects such as transnational railway networks.
“In addition to hedging tools, we are also utilizing political risk and partial risk guarantees that protect investors from policy or sovereign-related risks,” she said. “These approaches help enhance project viability and investor confidence, which are essential for mobilizing private capital at scale,” she added.
According to Ahmed, the World Bank’s suite of credit enhancement tools—covering construction, operational, and political risks—acts as a catalyst for leveraging limited public sector funds to unlock greater private sector financing.
The Bank is also working through the International Finance Corporation (IFC) to structure bankable public-private partnership (PPP) models and strengthen the legal and regulatory frameworks needed to sustain cross-border rail initiatives.
“Our IFC advisory platforms are providing technical assistance for projects like the Lobito Corridor, helping governments design sound concession agreements and fair revenue-sharing mechanisms,” she added.
Ahmed concluded by stressing that the World Bank’s efforts to expand currency risk hedging and other innovative financial instruments were aimed not only at protecting investors but also at building resilience in Africa’s infrastructure financing landscape.
“These measures will ensure that regional rail projects remain viable and sustainable, even amid global market fluctuations,” she affirmed.
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