> ## Content Index > Fetch the complete content index at: https://blog.financely-group.com/llms.txt > Use this file to discover other available public pages before exploring further. # Hedging Currency Risk in Project Finance - URL: https://blog.financely-group.com/hedging-currency-risk-in-project-finance/ - Published: 2026-08-27T00:47:23.000Z - Updated: 2026-08-27T00:47:23.000Z - Description: How projects in volatile-currency markets manage FX risk using local-currency debt, swaps, tariff indexation, reserves and blended financing. - Author: Financely Debt Advisors - Tags: project finance A project can perform exactly as expected operationally and still default because its debt is denominated in the wrong currency. This is one of the most important structuring problems in emerging-market project finance: the project earns local currency, while lenders expect repayment in U.S. dollars or euros. When the local currency depreciates, the project's physical output has not necessarily changed. Traffic on the toll road may be identical. Electricity production may remain on budget. The telecom tower portfolio may maintain the same occupancy. Water consumption may remain stable. The debt service measured in local currency can nevertheless increase dramatically. In countries with volatile currencies, foreign-exchange risk therefore needs to be treated as part of the capital structure from the beginning. It should not be left as a treasury problem to solve after financial close. Local-Currency Project Revenue ↓ Operating Costs ↓ Cash Available for Debt Service ↓ Currency Conversion ↓ USD / EUR Debt Service ↓ FX Movement Determines Actual Coverage The World Bank's PPP risk-allocation guidance identifies exactly this problem: project finance debt is frequently sourced from foreign lenders in hard currency while project revenues remain in local currency. When the exchange rate diverges, debt service can increase substantially unless the revenue structure, hedging arrangement or another contractual mechanism absorbs the difference. [See the World Bank's project-finance risk allocation guidance](https://ppp.worldbank.org/risk-allocation?ref=blog.financely-group.com). ### Financing a Project With Currency Mismatch? Financely structures project debt, blended capital stacks and risk-mitigation mechanisms for eligible energy, infrastructure and industrial projects where revenues, capex and debt are denominated in different currencies. [Request a Quote ](https://www.financely.io/requestaquote?ref=blog.financely-group.com) ## The Fundamental Project Finance Currency Mismatch Consider a solar project in an emerging market. Construction equipment may be imported and priced in dollars. The EPC contractor may require substantial foreign-currency payments. International lenders may only be willing to provide long-term senior debt in dollars. The power purchase agreement, however, may pay the project company in local currency. The project therefore has a structural short position in dollars. Every debt-service period requires the SPV to: 1. collect local-currency revenue; 2. pay operating expenses; 3. convert the remaining local currency into dollars; and 4. make scheduled principal and interest payments. If the exchange rate changes materially between financial close and debt service, the project's debt-service coverage can deteriorate even if EBITDA remains exactly on budget in local-currency terms. ## A Simple Example Shows How Quickly DSCR Can Collapse Assume a project produces annual cash available for debt service of 10 billion units of local currency. Annual dollar debt service is $5 million. | Scenario | FX Rate | Debt Service in Local Currency | DSCR | | ---------------- | ----------- | ------------------------------ | ----- | | Financial Close | 1,000 / USD | 5.0B | 2.00x | | 25% Depreciation | 1,250 / USD | 6.25B | 1.60x | | 50% Depreciation | 1,500 / USD | 7.50B | 1.33x | | 75% Depreciation | 1,750 / USD | 8.75B | 1.14x | Nothing happened to the plant. Nothing happened to production. Nothing happened to the customer. Yet a project that originally had 2.00x debt-service coverage has moved dangerously close to 1.00x simply because its debt and revenues were denominated in different currencies. ## Nigeria Is a Clear Example of Why the Structure Matters Nigeria illustrates the danger of assuming that today's exchange rate can simply be extended throughout a long-term project model. The naira underwent a major repricing following foreign-exchange reforms beginning in 2023\. More recently, exchange-rate conditions have become considerably more orderly, but infrastructure sponsors considering long-dated foreign-currency debt still need to model the possibility of further two-way currency movement. The IMF's 2026 Article IV documentation reported an annual average official exchange rate of approximately NGN 1,520 per U.S. dollar in 2025, compared with approximately NGN 1,479 in 2024, while also emphasizing continued exchange-rate flexibility and deeper FX-market functioning. [Read the IMF's 2026 Nigeria Article IV report](https://www.imf.org/-/media/files/publications/cr/2026/english/1ngaea2026001.pdf?ref=blog.financely-group.com). ## Egypt Has Also Made Exchange-Rate Flexibility Central Egypt provides another important case. The Egyptian pound has experienced several major adjustments over recent years as the country moved toward greater exchange-rate flexibility. IMF reporting shows the official EGP/USD rate moving within approximately 46.99 to 51.75 between April and December 2025\. In 2026, the IMF continued to emphasize exchange-rate flexibility as part of the country's policy response to external shocks. For a project sponsor, that policy direction has a very practical implication. A 15-year infrastructure model should not assume that the exchange rate at financial close will remain the economic conversion rate for dollar debt service throughout the loan. [See the IMF's latest 2026 Egypt review](https://www.imf.org/en/publications/cr/issues/2026/08/13/arab-republic-of-egypt-seventh-review-under-the-extended-arrangement-under-the-extended-578818?ref=blog.financely-group.com). ## Ghana Shows That Currency Volatility Works in Both Directions Currency risk is not synonymous with permanent depreciation. Ghana's cedi appreciated sharply during 2025 as reserves improved, gold exports strengthened and confidence returned. The IMF estimated appreciation of approximately 36% against the dollar during 2025\. By August 2026, however, market reports again showed periods of downward pressure as corporate and offshore dollar demand increased. This is exactly why project finance should treat FX as a risk distribution rather than a one-direction forecast. [Review the IMF's 2026 Ghana Article IV consultation](https://www.imf.org/en/publications/cr/issues/2026/08/04/ghana-2026-article-iv-consultation-sixth-review-under-the-arrangement-under-the-extended-578480?ref=blog.financely-group.com). ## Argentina Requires the Same Discipline Argentina has historically presented one of the clearest examples of why long-term projects need a deliberate currency strategy. Its exchange-rate framework has continued to evolve, including the use of an expanding exchange-rate band and market intervention rules intended to allow greater exchange-rate flexibility while reserves are rebuilt. A project with peso revenues and dollar debt therefore needs more than a base-case FX assumption. Sponsors need to understand what the project looks like after devaluation, inflation pass-through, tariff repricing delays and higher local interest rates. [See the IMF's 2026 Argentina review](https://www.elibrary.imf.org/view/journals/002/2026/105/article-A001-en.xml?ref=blog.financely-group.com). ## The First Hedge Is Matching Revenue and Debt Currency Before buying derivatives, sponsors should ask the simpler structural question: Can the debt be borrowed in the same currency in which the project earns revenue? If a project earns Kenyan shillings, borrowing in Kenyan shillings creates a natural hedge. The exchange rate can move substantially against the dollar without directly changing the local-currency amount required to make scheduled debt payments. The trade-off is that local-currency interest rates may be higher and long-dated local liquidity may be scarce. IFC describes local-currency financing as one of its primary tools for protecting emerging-market companies against FX mismatch. Since 2014, IFC says it has committed nearly $32 billion equivalent across more than 70 local currencies. [See IFC Treasury Client Solutions](https://www.ifc.org/en/what-we-do/products-and-services/treasury-client-solutions?ref=blog.financely-group.com). ## Local-Currency Project Debt Can Be More Expensive and Still Be Safer Sponsors frequently compare a 9% dollar loan with a 16% local-currency loan and conclude that dollar debt is obviously cheaper. That comparison is incomplete. The dollar facility contains an embedded currency exposure. If the local currency loses 20% or 30% of its value during a period when tariffs cannot immediately adjust, the supposedly cheaper dollar loan can create far greater pressure on project cash flow. Debt should therefore be compared on a risk-adjusted basis rather than solely through the quoted interest margin. ## Kenya Provides a Useful Local-Currency Financing Example In 2025, IFC and Standard Chartered announced a local-currency facility designed specifically to expand long-term emerging-market lending. The first transaction involved **KES 9 billion, approximately $70 million equivalent**, provided to IFC to support digital infrastructure investment in Kenya. The structure allows projects with Kenyan-shilling revenues to access long-duration financing without automatically carrying a dollar mismatch. [Review the IFC and Standard Chartered local-currency facility](https://www.ifc.org/en/pressroom/2025/ifc-and-standard-chartered-expand-lending-in-local-currencies?ref=blog.financely-group.com). ## Cross-Currency Swaps Can Convert Hard-Currency Debt Where a lender can only provide dollar or euro debt, a cross-currency swap can sometimes convert the economic exposure into local currency. In simplified terms, the project borrows dollars from the lender while entering into a separate hedge that exchanges dollar debt-service obligations for scheduled local-currency payments. International Lender ↓ USD Loan ↓ Project Company ↕ Cross-Currency Swap ↕ Hedge Counterparty Project Economically Pays Local Currency Hedge Counterparty Services USD Exposure This can solve the currency mismatch without requiring the senior lender itself to source local currency. IFC's local-currency syndication programme specifically describes structures using overlay swaps and hedged loan participations to allow offshore lenders to participate while the borrower receives local-currency financing. [See IFC's local-currency syndication structures](https://www.ifc.org/en/what-we-do/sector-expertise/syndicated-loans-and-mobilization/local-currency-syndications?ref=blog.financely-group.com). ## Long-Dated Swaps Are Not Available Everywhere The theoretical solution is not always the executable solution. A 15-year power project might require a 15-year currency hedge. In a deep currency market, a bank may be willing to quote long-dated forwards or swaps. In a frontier market, liquidity can disappear well before the required maturity. The project can face: - short maximum hedge tenor; - large bid-ask spreads; - expensive forward points; - collateral requirements; - mark-to-market exposure; - counterparty credit limits; - limited offshore convertibility; - capital controls; and - difficulty rolling the hedge during periods of stress. Project-finance models should therefore use executable hedge quotations rather than assuming that a derivative can be purchased at a convenient theoretical price. ## Currency Forwards Work Better for Shorter Exposure Forward contracts can be useful where the currency exposure is known and relatively short. Construction-phase payments are a common example. A project may know that it must pay a turbine supplier $8 million six months from now. The sponsor can potentially lock the local-currency cost of that payment today through a forward contract. This is materially different from attempting to hedge 15 years of operating cash flows whose timing and amount will vary with production, inflation and tariff adjustments. ## Currency Options Provide Protection Without Fixing the Entire Rate Options can protect a project against extreme depreciation while allowing it to benefit if the local currency strengthens. The project purchases the right to exchange currency at a defined strike rate. The cost is the option premium. This can be useful where the sponsor is particularly concerned about tail risk but does not want to lock the entire exposure through a forward or swap. EBRD lists currency swaps, interest-rate swaps, caps, collars and options among the risk-management instruments that can accompany project financing. [See EBRD project-finance products](https://www.ebrd.com/home/what-we-do/products-and-services/ebrd-project-financing/loans.html?ref=blog.financely-group.com). ## Tariff Indexation Can Push Currency Risk Into the Revenue Contract Sometimes the strongest hedge is contractual rather than financial. A concession agreement, PPA, availability-payment contract or long-term offtake agreement can provide for tariff adjustments when the exchange rate changes. For example, part of an electricity tariff can be indexed to the dollar because imported equipment, senior debt and major maintenance expenditure are dollar-linked. The project still receives local currency. But the amount of local currency increases as the exchange rate weakens. This creates an economic hedge between revenue and debt service. ## Full Dollar Indexation Can Create Another Problem Contractual indexation does not make currency risk disappear. It reallocates it. If a local electricity tariff rises automatically every time the domestic currency weakens, the offtaker or end consumer bears the economic impact. A severe devaluation can therefore create affordability problems, political opposition or pressure to renegotiate the tariff. Lenders consequently need to evaluate not only whether indexation exists legally, but whether the offtaker and political system can sustain the indexed payment in an extreme currency scenario. ## Partial Indexation Is Often More Realistic A project can split its tariff into components. | Cost Component | Possible Indexation | | ------------------ | ------------------------ | | Local Payroll | Domestic inflation index | | Local O&M | Domestic CPI | | USD Debt Service | USD/local FX rate | | Imported Equipment | USD or EUR index | The tariff then reflects the actual currency structure of the project's cost base rather than applying one index indiscriminately to the entire revenue stream. ## Dollar-Denominated Revenue Can Create a Natural Hedge Some projects generate hard-currency revenue naturally. Examples can include: - export mines; - LNG facilities; - oil and gas projects; - export-oriented industrial plants; - ports receiving dollar-linked charges; - commodity processing projects; - international data infrastructure; and - projects with dollar-denominated offtake agreements. Dollar debt can be substantially more appropriate for these projects because revenues and debt service move in the same currency. Financely's [project finance advisory](https://www.financely.io/projectfinance?ref=blog.financely-group.com) work examines this relationship between project cash flow, contract structure and the proposed debt currency before lender distribution. ## Export Projects Can Still Have Partial Currency Mismatch A mining project selling copper in dollars may appear perfectly hedged against dollar debt. It may still have substantial local-currency costs. Payroll, taxes, domestic transport and local contractors can be paid in local currency while revenue remains dollar-linked. In that case, local-currency depreciation can actually improve project margins in dollar terms. The correct hedge therefore depends on the complete currency composition of both revenue and expenditure, not simply the denomination of the sales contract. ## Match Debt Tranches to Revenue Tranches A project does not have to choose between 100% dollar debt and 100% local-currency debt. A blended capital structure can be more efficient. For example: **40% local-currency senior debt** against domestic revenue. **30% USD senior debt** against the dollar-indexed portion of the tariff. **10% subordinated capital** providing additional coverage. **20% sponsor equity** absorbing construction and operating risk. The project can hedge the residual mismatch rather than attempting to hedge the entire capital structure. ## Development Finance Institutions Can Fill the Local-Currency Gap Local commercial banks may not have the tenor required for infrastructure. A domestic bank may be comfortable lending for three or five years while a solar plant, hospital, toll road or water concession requires 12 to 20 years. Development finance institutions can sometimes help extend that duration through local-currency loans, risk-sharing arrangements, guarantees and swap-based structures. IFC, for example, offers local-currency loans, structured finance, guarantees and risk-management products specifically to reduce currency mismatches in emerging markets. ## Credit Guarantees Can Mobilize Local Banks Sometimes the currency is available locally but the bank lacks credit appetite for the project. A partial credit guarantee can solve a different part of the problem. The domestic bank already has access to local-currency deposits. The guarantee provider assumes part of the project credit risk, allowing the domestic institution to make a larger or longer loan in the same currency as project revenue. IFC specifically identifies local-currency credit guarantees as a mechanism for situations where a local lender has an advantage in sourcing the currency but is constrained by credit exposure limits. [See IFC's guarantee framework](https://www.ifc.org/en/what-we-do/products-and-services/treasury-client-solutions/guarantees-for-approved-exposures?ref=blog.financely-group.com). ## Debt Service Reserve Accounts Can Absorb Short-Term FX Shocks A debt service reserve account does not eliminate currency risk. It can buy time. A project might maintain six months of scheduled debt service in a reserve account. If a temporary currency dislocation occurs, the project can draw on that reserve rather than immediately defaulting. The reserve can then be replenished after tariff adjustments, hedge settlements or currency normalization. The DSRA is therefore a liquidity buffer around the hedge, not the hedge itself. ## A Currency Reserve Can Be Separate From the DSRA Some transactions can build a dedicated foreign-exchange reserve or liquidity facility. The reserve is funded during stronger periods and used when the project faces unusually high currency-conversion requirements. This is particularly relevant where tariff indexation operates with a lag. If the tariff is adjusted annually while the currency can move daily, the reserve helps bridge the period between devaluation and the next contractual tariff reset. ## Offshore Escrow Does Not Eliminate Conversion Risk Sponsors sometimes assume an offshore debt-service account solves the problem. It solves a cash-control problem. It does not necessarily solve the economic currency mismatch. The project still needs to generate enough local currency and obtain permission and liquidity to convert that currency into dollars before transferring it offshore. Convertibility risk and transfer risk therefore need to be analyzed separately from pure market FX risk. ## Convertibility Risk Is Different From Devaluation Risk A currency can have a market price while dollars remain difficult to obtain. The project can theoretically have enough local-currency cash to service debt but still be unable to source the foreign currency required for payment. Emerging-market project finance therefore needs to distinguish: - **FX price risk:** how much local currency is required to buy one dollar. - **Convertibility risk:** whether dollars can actually be purchased. - **Transfer risk:** whether purchased dollars can legally be transferred offshore. A derivative can hedge the first risk. It may not solve the other two. ## Political Risk Insurance Can Address Transfer Restrictions Political-risk products can sometimes cover currency inconvertibility or transfer restrictions where those risks result from government action. This is different from insuring an unfavorable market exchange rate. If the currency simply depreciates, political-risk insurance generally does not make the economic loss disappear. Sponsors therefore need to map each currency-related risk to the instrument that actually addresses it. ## Government Support Can Be Structured Around Extreme FX Events Public-private infrastructure projects sometimes allocate a portion of currency risk to the public sector. The government does not necessarily guarantee every exchange-rate movement. Instead, the concession can establish a risk-sharing band. For example: **0% to 10% depreciation:** project company absorbs the movement. **10% to 25%:** tariff indexation partially compensates the project. **Above 25%:** extraordinary adjustment mechanism or government support becomes available. This prevents the public sector from absorbing ordinary market volatility while protecting project bankability against extreme movements that private capital cannot economically hedge for the full concession period. ## Construction FX Risk Is Often Different From Operating FX Risk Project sponsors should split the problem into phases. During construction, foreign currency may be required for imported equipment and EPC payments. During operations, the major exposure may instead be dollar debt service. The project can therefore use short-dated forwards for committed construction payments and a different long-term solution for operating debt service. One hedge does not have to cover the entire project life. ## Refinancing Can Change the Currency Structure Later Construction debt does not necessarily need to become permanent debt. A project can initially use hard-currency financing where international lenders are willing to take construction risk. After completion and operating stabilization, the project can refinance into local-currency institutional debt, bank financing or a domestic bond. This can transfer the mature asset out of the hard-currency bridge and into a capital structure better matched to long-term local revenues. ## Currency Risk Directly Affects Debt Sizing A project with unhedged dollar debt should not receive the same leverage as a project with fully matched revenues. Lenders typically run currency sensitivities through the financial model. They can examine DSCR under: - 10% depreciation; - 20% depreciation; - 30% depreciation; - one-time devaluation; - continued annual depreciation; - delayed tariff indexation; - lower inflation pass-through; - reduced convertibility; and - combined FX and interest-rate stress. Financely's [debt placement and capital raising advisory](https://www.financely.io/debt-placement-capital-raising-advisory?ref=blog.financely-group.com) work includes capital-stack design, lender modelling and sensitivity analysis for transactions where debt capacity depends on project cash flow. ## Do Not Hide FX Risk Inside the Base Case A common modelling mistake is to assume one smooth exchange-rate depreciation curve for 20 years. Real emerging-market currencies do not behave that way. They can remain stable for several years and then adjust sharply. They can depreciate and then appreciate. Liquidity can disappear temporarily. Government intervention can change. The model should therefore contain discrete FX shocks rather than simply extending an inflation differential through a smooth forecast. ## Build the FX Waterfall Before Approaching Lenders A lender-ready project should explain exactly how local-currency revenue becomes foreign-currency debt service. Project Revenue ↓ Taxes and Operating Costs ↓ Local-Currency Debt Service ↓ Hedge Settlement / Currency Conversion ↓ USD Debt Service ↓ Reserve Replenishment ↓ Restricted Payments ↓ Sponsor Distribution The waterfall should also specify which accounts are domestic, which are offshore, where conversion occurs and who bears the cost if the hedge rate differs from the tariff indexation mechanism. ## The Hedge Counterparty Has Credit Requirements Too Hedging is not free balance-sheet capacity. A bank providing a long-term swap takes counterparty exposure to the project company. The hedge provider may therefore require security, collateral, intercreditor rights or priority under the project waterfall. Senior lenders will want the hedge documentation integrated with the financing documents. Currency hedging in project finance is therefore part of the secured financing structure, not a standalone retail treasury product. ## Project Sponsors Should Compare Six Structures | Structure | Best Use | Main Constraint | | ------------------- | ---------------------------------------- | ------------------------------------------ | | Local-Currency Debt | Local-currency revenues. | Rate and tenor availability. | | Cross-Currency Swap | Hard-currency lender with local revenue. | Long-dated hedge liquidity and cost. | | FX Forward | Known short-term payments. | Poor fit for long project tenors. | | Currency Option | Protecting against extreme downside. | Premium cost. | | Tariff Indexation | Long-term concessions and PPAs. | Offtaker affordability and political risk. | | Blended Structure | Complex emerging-market projects. | Documentation and coordination. | ## The Best Hedge Is Usually a Combination Large emerging-market projects rarely solve currency risk through one instrument. A more resilient financing package can combine local debt, hard-currency debt, tariff indexation, short-term forwards, reserves and political-risk protection. Each tool covers a different part of the exposure. **Local debt** reduces structural operating mismatch. **Forwards** fix known construction payments. **Swaps** convert a portion of long-term foreign debt. **Tariff indexation** transfers part of the residual FX movement into revenue. **DSRA and FX reserves** absorb timing mismatches. **Political-risk insurance** can address qualifying convertibility and transfer restrictions. The objective is not to eliminate every currency movement. The objective is to prevent an exchange-rate shock from making an otherwise viable project insolvent. ## What Financely Reviews Before Debt Placement Financely structures project-finance mandates around the actual cash flows and risks of the asset. Currency analysis forms part of that work where project revenues, capex, operating costs and proposed financing do not use the same currency. **Revenue Currency**Identify the currency and indexation mechanism of each project revenue stream. **Cost Currency**Separate local operating costs from imported equipment, foreign EPC obligations and other hard-currency expenditure. **Debt Currency**Assess whether local, hard-currency or blended debt is economically appropriate. **FX Sensitivities**Model depreciation, sudden devaluation, tariff-reset delays and convertibility stress. **Hedge Structure**Evaluate local debt, swaps, forwards, options, indexation, reserves and risk-sharing mechanisms. **Lender Positioning**Present the currency risk and mitigants clearly to project lenders and private-credit providers. For projects requiring a broader debt process, Financely's [private credit advisory](https://www.financely.io/private-credit-advisory-for-middle-market-companies?ref=blog.financely-group.com) work can also support bridge, structured and transitional debt requirements around project sponsors and operating companies. ## What Sponsors Should Submit A project with material currency exposure should provide enough information to map the complete FX position. 1. project financial model; 2. construction budget by currency; 3. EPC payment schedule; 4. revenue contract or PPA; 5. tariff indexation formula; 6. operating-cost breakdown by currency; 7. proposed debt amount and currency; 8. debt-service schedule; 9. existing hedge proposals or quotations; 10. available local-currency financing; 11. reserve-account requirements; 12. offtaker credit information; 13. currency-conversion restrictions; and 14. relevant government support or concession provisions. Currency risk can then be treated as a financing problem with specific mitigants rather than a vague macroeconomic risk factor. ### Structure Project Debt Around the Revenue Currency If your project earns local currency but requires USD or EUR financing, submit the model, contracts, capex, proposed debt and currency exposures. Financely can assess a more financeable capital structure and approach relevant capital providers. [Request Project Finance Review ](https://www.financely.io/requestaquote?ref=blog.financely-group.com) ## Project Finance Currency Hedging FAQ ### Why is currency risk important in project finance? Project debt is often long dated. If revenue is denominated in local currency while debt service is payable in dollars or euros, depreciation can materially increase the amount of local cash required to service the same nominal debt. ### What is the best way to hedge FX risk in a project? Where commercially available, matching the debt currency to the revenue currency is generally the cleanest structural solution. Residual exposure can then be managed through swaps, forwards, options, tariff indexation, reserves or risk-sharing mechanisms. ### Can a project borrow entirely in local currency? Potentially. Availability depends on local banking capacity, capital markets, interest rates, required tenor and project credit quality. DFIs and guarantees can sometimes increase local-currency lending capacity. ### What is a cross-currency swap? It is a derivative structure that exchanges cash flows in one currency for cash flows in another. In project finance it can allow a borrower with dollar debt to create an economic local-currency debt-service profile. ### Can a PPA hedge exchange-rate risk? Yes, if the tariff includes appropriate foreign-currency indexation or another adjustment formula. The bankability of that mechanism depends on the creditworthiness of the offtaker and whether the indexed tariff remains economically and politically sustainable. ### Does a DSRA hedge currency risk? No. A debt service reserve account provides liquidity during stress but does not change the exchange rate. It is normally used alongside other currency-risk mitigants. ### What is currency convertibility risk? Convertibility risk is the risk that the project has local currency but cannot obtain sufficient foreign currency to meet offshore obligations. This is different from the risk that the exchange rate itself moves adversely. ### Can political risk insurance cover currency losses? Certain political-risk products can cover qualifying restrictions on currency conversion or transfer. They generally do not insure ordinary market depreciation simply because the local currency becomes weaker. ### Which projects are most exposed to FX mismatch? Infrastructure, power, telecom, healthcare, transport and other projects that earn regulated or contracted local-currency revenue while relying on foreign-currency equipment or international debt are particularly exposed. ### Can Financely structure project financing in volatile-currency markets? Financely can evaluate eligible project-finance mandates, model currency mismatches, structure the capital stack and position transactions with relevant lenders and capital providers. Final financing and hedge availability remain subject to market liquidity, counterparty underwriting and transaction-specific documentation. **Disclaimer** This article is provided for general commercial and educational information only. Currency derivatives, project finance facilities and risk-management structures involve substantial financial, legal, regulatory, counterparty and market risks. Hedge availability, pricing and tenor depend on currency-market liquidity, credit quality, collateral requirements, local regulation and counterparty appetite. Historical exchange-rate movements do not predict future currency performance. Financely provides paid structured-finance advisory and capital-placement services on a best-efforts basis. Financely is not a bank, direct lender, derivatives dealer or guarantor of financing or hedging availability. Project financing remains subject to technical, commercial and legal diligence, KYC, AML, sanctions screening, project economics, definitive documentation, hedge-counterparty requirements and independent lender approval.