Cooperatives Rural and Development Banking (CRDB) has received 200 US million US dollars (460 billion shillings) facility to finance climate-resilient agriculture and adapt mitigating technologies from United Nations Green Climate Fund (GCF).
The lender, one of the largest banks in the country, said the facility, a first of its kind in the region, consists of 100 million US dollars (230bn/-) from GCF targeting more than 6.0 million beneficiaries in the agriculture sector in the country.
CRDB Group CEO and Managing Director Abdulmajid Nsekela said the approval of the funding for the programme reinforces the bank’s commitment to Sustainable Development Goals (SDG) goal 13-climate action and validates the lender’s efforts to promote sustainable livelihoods.
“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,” Mr Nsekela said through a release on Tuesday.
Under the agriculture adaptation and technology deployment programme, the bank targets to empower smallholder farmers in rural to improve their incomes and sustain livelihoods through agricultural activities by providing affordable credit while supporting climate adaptation technology and practices deployment in the rural.
CRDB Group is the first private commercial bank to be accredited by GCF as a financial intermediary in green financing in East Africa, and the fourth in its category on the continent.
It joins the list of other leading organisations actively involved in sustainable investment in Africa and promoting green projects in national development planning. The bank was accredited in 2019, following a due diligence process to ascertain its readiness to undertake climate-resilient projects.
“We are strategic about our intent to support the entire agriculture value chain because we understand the potential that this sector has in transforming households,” Mr Nsekela said.
Early last month the GCF Board approved a Tanzania Agriculture Climate Adaptation Technology Deployment Program (TACADTP) proposal submitted by the bank’s Sustainable Finance Unit (SFU), domiciled within the Business Transformation Directorate that is responsible for driving change for the Dar es Salaam Stock Exchange (DSE) listed bank.
The proposal was developed as part of the CRDB’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 SDGs.
CRDB’s Director of Business Transformation Mr Leo Ndimbo said the lender incorporated environmental, social and governance (ESG) standards in their business model to align with actions and activities with the broad aspirations contained in the SDGs.
“This programme will enable CRDB Group to develop innovative financing mechanisms for agricultural borrowers to promote the adoption of adaptation technologies that are most suited to Tanzania and address current and future climate risks; to ensure a resilient increase in crop yields,” Mr Ndimbo said.
CRDB’s Senior Manager for Sustainable Finance, Kenneth Kasigila, said: “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.”
Over the 20-year program lifetime, TACATDP targets to reach more than 1.2 million direct beneficiaries and 4.9 million indirect beneficiaries (about 4.67per cent of the population through the transformation of the country’s climate financing processes.
The Program, which will be rolled out in early 2022, is expected to improve the country’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.
CRDB is the largest lender to the agriculture sector, with nearly 45 per cent of its portfolio focused on the agriculture value chain.
By Abduel Elinaza