Climate finance in Tanzania

Climate finance in Tanzania is the mobilization of local, national, and transnational financial resources aimed at addressing the challenges posed by climate change, with a focus on reducing greenhouse gas emissions and promoting climate resilience. In Tanzania, a developing nation with a largely agrarian economy, the impacts of climate change have become increasingly pronounced. The country faces rising temperatures, erratic rainfall patterns, and increased frequency of extreme weather events, all of which threaten livelihoods, food security, and economic stability.

Background

Tanzania is highly vulnerable to the adverse impacts of climate change, including prolonged droughts, frequent floods, and shifts in weather patterns that severely affect agriculture, water resources, and biodiversity. The agricultural sector, which accounts for approximately one-third of the nation's GDP and employs nearly 70% of the population, is particularly susceptible to these climatic changes. In response, Tanzania has placed significant emphasis on climate change adaptation strategies, with a particular focus on rural areas and vulnerable communities that are most at risk from these environmental challenges.

Tanzania ratified the Paris Agreement in 2018, thereby affirming its dedication to global initiatives aimed at combating climate change. Through the implementation of its Nationally Determined Contributions (NDCs), the country seeks to reduce greenhouse gas emissions and enhance its resilience to climate-related risks. Climate finance is a critical component in facilitating the realization of these objectives.

Sources of climate finance in Tanzania

Tanzania accesses climate finance from various sources, including international funds, bilateral and multilateral donors, and private sector investments. These resources are directed toward both adaptation and mitigation projects across different sectors. International Climate Funds including Green Climate Fund (GCF): Tanzania has benefited from the GCF, a financial mechanism under the United Nations Framework Convention on Climate Change (UNFCCC), which supports projects that build climate resilience and reduce emissions. Notable projects funded by the GCF in Tanzania include climate-resilient agriculture and renewable energy initiatives

Global Environment Facility (GEF): Tanzania has also received support from the GEF to enhance its capacity to adapt to climate impacts, particularly through biodiversity conservation and sustainable land management.Adaptation Fund (AF): Tanzania is a beneficiary of the Adaptation Fund, which focuses on projects that help vulnerable communities adapt to climate change impacts.Bilateral and Multilateral Donors such as the World Bank supports climate-related projects in Tanzania, such as the Tanzania Climate Action Project, which enhances the country's ability to manage natural resources and increase climate resilience in agriculture. European Union (EU) has provided financial and technical assistance to Tanzania for climate-smart agriculture and sustainable forest management initiatives.Other Bilateral Partners: Countries like Germany, Norway, and the United Kingdom have also contributed through various climate programs that support Tanzania's adaptation and mitigation efforts.

Private Sector and Carbon Markets: The private sector in Tanzania is increasingly involved in renewable energy and clean technology investments, particularly in the development of solar, wind, and hydropower projects. Tanzania has engaged in carbon trading initiatives, including REDD+ (Reducing Emissions from Deforestation and Forest Degradation), which allows the country to receive financial compensation for forest conservation efforts that contribute to reducing carbon emissions.

Key climate finance projects in Tanzania

Sustainable land management and climate-resilient agriculture: Tanzania has implemented several projects aimed at promoting climate-resilient agricultural practices. These initiatives are designed to enhance food security, improve water management, and reduce the vulnerability of farmers to climate change impacts. Climate finance from the GCF and the World Bank has been instrumental in supporting these efforts.

Renewable energy development: The expansion of renewable energy in Tanzania is a key priority to meet the country's growing energy needs while reducing greenhouse gas emissions. Climate finance has facilitated the development of solar, wind, and mini-hydropower projects that provide clean and affordable energy, particularly to rural areas.

Forest conservation and REDD+: Tanzania is one of the pioneering countries in the implementation of REDD+, a global initiative aimed at reducing emissions from deforestation and forest degradation. Through REDD+ projects, Tanzania has received financial resources for forest conservation, sustainable forest management, and community-based initiatives that provide alternative livelihoods for people living in forested areas