Enabling Climate Adaptation Investment Markets for Agri-food systems, Housing and Manufacturing in Tanzania
SCALING PRIVATE DEBT FOR ADAPTATION IN AFRICA
Africa faces a substantial adaptation and resilience financing gap, requiring an estimated $70Bn annually by 2030[1]. Yet current adaptation finance flows to Sub-Saharan Africa amounted to only $12.96 billion in 2023[2]. This persists despite adaptation investments generating returns of 2 to 15 times the initial investment.
Private debt remains an underutilized instrument for adaptation: while 51% of tracked climate finance to Africa comes as debt[3], the share from private sources specifically targeting adaptation is insignificant. For example, in Tanzania, climate finance from private sources is estimated to account for only 5% of total flows[4].
For commercial banks and other inclusive financial service providers, adaptation finance is both risk mitigation and opportunity. Climate change is a growing business risk — from agri-food systems to housing and manufacturing, climate shocks threaten borrowers’ ability to service loans and deepen financial exclusion. Banks and financiers that act now will reduce physical climate risk, open new markets, and strengthen long-term profitability.
THE INVESTMENT CASE FOR ADAPTATION
Under the Africa Adaptation Acceleration Program (AAAP), GCA is scaling its support to financial systems across Africa to foster a more resilient economy. This integrated support combines market opportunity analyses, targeted technical assistance to domestic banks, capacity building, and support for national policy reforms.
In collaboration with CGAP and CGIAR, GCA has conducted two market analyses to demonstrate that climate adaptation technologies and services in Tanzania, Kenya and Zambia are bankable. The studies identify and quantify the country-level market size and financial returns for nine commercially viable adaptation solutions across sectors: five in agri-food systems, and four in housing, energy, manufacturing and nature-based solutions.
INVITATION TO THE ONLINE WEBINAR
GCA, FSD Tanzania and the World Economic Forum (Forum) under their Africa Business Adaptation Platform, cordially invite you to an online webinar to unlock Climate Adaptation Investment Markets in Tanzania.
The aim is to showcase specific opportunities for climate adaptation lending across agriculture and food systems, housing and manufacturing sectors. The recording of the webinar will accompany the GCA–Bank of Tanzania Climate Adaptation Finance Masterclass for financial institutions in Tanzania, soon to be hosted on Bank of Tanzania Academy website.
The webinar is led by GCA and FSD Tanzania and will bring together key actors in adaptation lending in Tanzania: from the regulator to bankers’ association, to enablers, and representatives of adapters, with the aim of identifying solutions for scaling Adaptation & Resilience Lending in Africa. The session will open with high-level remarks by the Bank of Tanzania. Discussion themes will include:
* Macro-economic perspective on climate-related financial risks and opportunities in Tanzania
* The need for inclusive adaptation finance
* Commercial viability of highlighted market opportunities: solar irrigation, hermetic storage solutions, cold storage for dairy, home upgrades for adaptation and climate efficient cooling in factories
* Enabling factors for greater adaptation lending: financial products and de-risking mechanisms
* Forming partnerships to enable financial institutions to finance bankable adaptation projects.
Panelists and participating organizations will include GCA partners and collaborating institutions such as Bank of Tanzania, Tanzania Bankers Association, CGAP and CGIAR.
[1] CPI. 2024. Landscape of Climate Finance in Africa 2024. https://www.climatepolicyinitiative. org/publication/landscape-of-climate-finance-in-africa-2024/
[2] CPI, Global Climate Finance Data, https://www.climatepolicyinitiative.org/resources/data-visualizations/global-landscape-of-climate-finance-data-dashboard/
[3] CPI. Global Climate Finance Data.
[4] Ibidem.