Conduct a Climate Risk Assessment of Tanzania Agricultural Development Bank

Tanzania's agricultural sector that is almost entirely rain-fed, is highly vulnerable to the predicted impacts of climate change, such as higher average temperatures and shifts in precipitation patterns. The World Bank estimates the economic losses from climate change impacts on agriculture at US$200 million every year. The scaling up of climate-smart agriculture (CSA) practices presents an opportunity to reduce such losses but the uptake of CSA practices and other climate adaptation measures, especially by small-scale farmers, is lagging behind. 

Tanzania Agricultural Development Bank (TADB) has been established by the government of Tanzania as a promoter of the development of the agriculture sector. In this role, TABD collaborates with Partner Financial Institutions (PFI) to supply agriculture financing, value chain development, investment in agricultural infrastructure, and climate change management and financing, among others. As agricultural development bank, TADB is a key actor in promoting the use of CSA practices and other climate adaptation measures across Tanzania.

Against this background, adelphi has been assigned by the African Development Bank (AfDB) to assist TADB to assess and understand the climate risk of its portfolio and develop tools, methodologies, and the capacity to mainstream climate-resilient lending practices across its portfolio. In a first step, adelphi conducted a climate risk assessment of TADB's portfolio to identify overall climate risk and rank sub-sectors/value chains according to levels of climate risk. Based on this assessment, adelphi recommended practical measures to address climate risk in the sub-sectors and value chains such as the use of climate information systems or the adoption of climate-smart agricultural practices. adelphi has also supported TADB in the integration and mainstreaming of climate risk assessments in its lending and portfolio management procedures and practices, including the integration into the internal banking software applications. Another workstream under the project entailed the review of TADB's climate policy in view of the newly established climate risk assessment processes. An important cornerstone of the project consisted in a series of trainings of TADB staff in the use of the tools and methodologies developed in the course of the assignment to ensure successful deployment and implementation of climate adaptation practices across its operations.