IDB Launches FX EDGE to Unlock Private Investment

SEVILLE — The Inter-American Development Bank (IDB) today launched FX EDGE, a new platform to help countries attract more private investment in sustainable development. 

Designed to provide tools to policymakers – a blended-finance and project-preparation facility, a liquidity facility, and an FX-derivative program – to overcome one of the oldest and most pressing barriers to investment, currency volatility, FX EDGE aims to increase resilience and unlock capital. 

FX EDGE builds on Brazil’s Eco Invest, a pioneering collaboration between the IDB and the Brazilian government, and is enabled by technical cooperation from the United Kingdom. In its first mobilization effort via a blended-financing auction, Eco Invest is already expected to attract $8 billion in private investment over the next two years. A second auction to recover degraded lands is underway, with more planned in the coming months. These will focus on investments for the Amazon region, project structuring, and equity mobilization – backed by a suite of FX-hedging tools. These actions are part of New Brazil – The Ecological Transformation Plan from the country's finance ministry, which aims to make Brazil one of the leaders in the low-carbon economy across different production sectors.

That experience now scales into a global platform – with backing from Brazil and the United Kingdom, which is also providing catalytic support to expand FX EDGE’s geographic reach.

“FX EDGE offers countries tools for policymakers, including to help overcome one of the biggest obstacles to private investment – foreign-exchange risk,” said IDB President Ilan Goldfajn. “What began as a partnership in Brazil is now scaling up, backed by strong demand, multilateral cooperation, and a clear focus on impact.”

“This partnership between the UK, the Inter-American Development Bank, and Brazil is a great example of how we can innovate together to reduce barriers to investment and mobilize more private-sector finance,” said UK Minister for Development Jenny Chapman. “Solutions like this one are a key part of the UK’s vision for how we can use finance to drive global progress over the next decade.”

At the core of FX EDGE is a flexible and scalable package that includes:

• Blended-Finance and Project-Preparation Facility: customized to each country’s needs to strengthen market readiness and attract co-investment.
• FX Liquidity Facility: A contingent credit line that activates when a country’s currency sharply depreciates. It helps projects with local-currency revenues meet their repayment obligations in foreign currency, ensuring they can continue servicing debt during periods of exchange-rate volatility. 
• FX Derivatives Program: A structure that channels long-term currency-hedging instruments via local central banks and financial institutions, backed by the IDB and other multilaterals’ strong credit ratings.

With support from the UK government, through the UK Sustainable Infrastructure Programme, the IDB will provide technical assistance and financial backing to help countries across Latin America and the Caribbean tailor and implement FX EDGE. Brazil will act as co-implementer in the region, sharing its experience and lessons learned from its work with the IDB.

“It is a source of pride to see Brazil’s experience with Eco Invest inspiring innovative financial solutions that are now gaining regional and global scale. By sharing this journey, we help other countries supported by the IDB also find ways to enable financing for the sustainable transition in emerging economies,” said Fernando Haddad, Brazil’s finance minister.

By addressing a core barrier to investment, FX EDGE delivers on the goals of the Financing for Development agenda – mobilizing international capital, enhancing financial resilience, and creating a scalable path to greater development impact.