The Green Climate Fund (GCF) and CRDB Bank Plc. have signed an agreement for a climate adaptation lending facility for smallholder farmers and agribusinesses in the United Republic of Tanzania on the sidelines of the 2022 Commonwealth Heads of Government Meeting (CHOGM) in Kigali, Rwanda.
The signing of the Funded Activity Agreement (FAA) marks a key step in kicking off the Tanzania Agriculture Climate Adaptation Technology Deployment Programme (TACATDP). The FAA sets the legal groundwork for GCF to transfer its USD 100 million co-investment to CRDB in this USD 200 million programme.
An estimated 90 per cent of agricultural land in Tanzania is held by smallholder farmers, and 98 per cent of economically active rural Tanzanian women are engaged in farming, making these groups especially vulnerable to climate change. TACATDP will strengthen the climate resilience of these groups and the country’s agriculture sector by removing the major financial, regulatory, and technical barriers related to accessing climate adaptation technologies. The programme will also serve to increase their access to finance and create new jobs in the sector.
“Climate change is impacting the people of the United Republic of Tanzania severely. GCF is proud of its partnership with CRDB Bank which enables them to provide access to financing to smallholder farmers and build their resilience,” said GCF Executive Director Yannick Glemarec. “This programme is a great example of how GCF and its partners in developing countries can collaborate to channel climate finance to those that need it the most. We value our continued partnership with CRDB Bank to support Tanzania in its climate ambitions.”
Using concessional resources from GCF, CRDB Bank will launch three new financial products to support local agribusiness: a dedicated credit line for climate adaptation technologies and practices; a credit guarantee facility to expand access to new borrowers; and a weather-indexed insurance product to help protect against losses from climate-related events.
“We are delighted to be partnering with GCF in addressing climate change threats that call for global solutions. This is in line with our current President’s, Her Excellency Samia Suluhu Hassan, aspirations in driving SDGs and Economic Diplomacy,” said CRDB Bank CEO Abdulmajid Mussa Nsekela. “This programme aims to reach more than 6.1 million direct and indirect beneficiaries through the transformation of the country’s climate financing processes to better address affordable climate adaptation technologies in the agriculture sector. This will ultimately lead to boosting food security and enhancing the resilience of smallholder farmers, thereby improving the livelihoods and quality of life of our citizens.”
The grant from GCF will also finance technical assistance to help government institutions incorporate climate risks in national planning and support agribusinesses in understanding best practices in climate-resilient agriculture.
CRDB Bank expects that establishing a successful track record through TACATDP will catalyse similar financial innovations at scale in Tanzania and other neighbouring countries. Increased awareness of climate threats and responsive planning will lead to the creation of an enabling environment for more adaptation efforts from the government, industry, and financial sectors.