The African Local Currency Bond Fund (ALCB Fund), managed by Cygnum Capital, has announced a significant $45 million investment from the Dutch development finance institution FMO, with additional participation from FMO Investment Management (FMO IM). This strategic injection of capital is aimed at deepening the fund’s mission to develop robust local currency corporate bond markets across Africa.
Established to catalyze sustainable development through financial market infrastructure, the ALCB Fund provides long-term, local currency financing to institutions that deliver broad-based impact. By anchoring bond issuances and mobilizing private sector capital, the fund plays a pivotal role in reducing foreign exchange risk for African issuers and enhancing macroeconomic resilience.
Brock Hoback, Fund Lead at the ALCB Fund, welcomed the new partnership:
We are delighted to welcome FMO and, for the first time, FMO Investment Management as partners in supporting the growth of the ALCB Fund. This additional $45 million will significantly enhance our capacity to support African corporate bond issuances in local currency, enabling issuers to access long-term financing while mitigating FX risks.
This marks FMO’s third investment in the ALCB Fund, underscoring its continued commitment to strengthening Africa’s financial systems. Angelica Ortiz-de Haas, Manager for African Financial Institutions at FMO, emphasized the strategic importance of local capital markets:
FMO is deeply committed to enlarging the scale and impact of local capital markets in Africa, which play a crucial role in improving macroeconomic resilience and providing a sustainable source of financing to companies that drive broad-based economic growth. By supporting local currency bond issuance, FMO aims to advance financial inclusion, MSME growth, access to food and renewable energy, and strengthen resilience in least developed countries.
For FMO Investment Management, this marks its first fund investment in the ALCB Fund. Nic Wessemius, Manager at FMO IM, highlighted the alignment with their broader investment philosophy:
We are thrilled to make our first fund investment in the ALCB Fund. Through FMO Investment Management, we aim to unlock institutional investor participation in high-impact opportunities originated by FMO in emerging markets. Investing in the ALCB Fund aligns with our philosophy that financial returns and positive development outcomes go hand in hand.
The new capital will enable the ALCB Fund to expand its reach and impact, supporting more issuers across Africa in accessing sustainable, long-term financing in their local currencies. This partnership also signals growing confidence in the fund’s ability to drive inclusive growth and financial innovation across the continent.
