Dar es Salaam. CRDB Bank Plc has officially unveiled a $200 million (about Sh459.9 billion) facility to finance climate-resilient and adaptation projects in the country, targeting six million beneficiaries in Tanzania’s agriculture sector.
In November 2019, CRDB Bank Plc was accredited by the United Nations Green Climate Fund (GCF) as the financial intermediary for the implementation of green financing in Tanzania, making it only the 4th commercial bank in Africa to obtain such an accreditation, after Ecobank Ghana and Attijariwafa Bank of Morocco.
CRDB Bank Plc said in a statement yesterday that on October 7, 2021, the GCF Board approved a Tanzania Agriculture Climate Adaptation Technology Deployment Programme (TACADTP) proposal that it (CRDB Bank) had submitted through its Sustainable Finance Unit (SFU).
“The proposal was developed as part of the bank’s broad sustainability strategy in which the bank aims to play a bigger role in mitigating the impact of climate change in line with the United Nations Sustainable Development Goals (SDGs),” the statement reads.
Through the facility -- which is the first of its kind in the region -- the GCF is unveiling a $100 million (Sh230 billion) funding while the Tanzanian lender is putting in an equal investment.
It joins the list of other leading organisations actively involved in sustainable investment in Africa and promoting green projects in national development planning.
The CRDB Bank Group CEO and managing director, Mr Abdulmajid Nsekela, said in the statement yesterday that the approval of funding for the programme reinforces the bank’s commitment to SDG goal 13 on climate action.
“Africa continues to bear the biggest brunt when it comes to climate change, yet it is the least contributor to global warming. We want to lead from the front in mitigating the impact of global warming by promoting climate-resilient activities and adaptation hence the partnership with GCF,” said Mr Nsekela.
Under the agriculture adaptation and technology deployment programme, CRDB Bank targets to empower smallholder farmers in rural Tanzania to improve their incomes and sustain livelihoods through agricultural activities by providing affordable credit.
According to the bank’s director for business transformation, Mr Leo Ndimbo, CRDB Bank Plc has incorporated environmental, social and governance (ESG) standards in its business model to align its actions and activities with the SDGs’ broad aspirations. The programme, he said, will enable CRDB Bank Group to develop innovative financing mechanisms for agricultural borrowers to promote the adoption of adaptation technologies that are most suited to Tanzania. It addresses current and future climate risks to ensure a resilient increase in crop yields.
“This programme will strengthen the resilience of Tanzania’s agriculture sector by facilitating access to agricultural climate adaptation technologies. This will be achieved by establishing a lending and de-risking facility that will make these technologies affordable to local farmers and agricultural enterprises, accompanied by technical assistance and support from government authorities,” said the bank’s senior manager for sustainable finance, Mr Kenneth Kasigila.
The facility, he said, would also strengthen awareness of climate threats and risk-reduction processes among government, industry actors and the financial sector.
Over the 20-year programme lifetime, TACATDP targets to reach more than 1.2 million direct beneficiaries and 4.9 million indirect beneficiaries through the transformation of the country’s climate financing processes to better address climate adaptation in the agriculture sector.
The programme will be rolled out early next year.
It will improve Tanzania’s capacity for adaptation to climate change, improve soil health, reduce high operation costs, reduce greenhouse gas emissions and improve the availability, and management of water resources. It will also help reduce post-harvest losses, improve incomes, guarantee higher yields and better-quality crops, reduce nutrient leaching, improve the efficiency of inputs and outputs (quantity and quality), increase food production, and improve livelihoods and quality of life of the citizens.
Currently, nearly 45 percent of CRDB Bank’s lending portfolio is focused on the agriculture value chain.