In Tanzania, the commercial bank CRDB is issuing a $68.3 billion green bond in local currency (the Tanzanian shilling). This transaction supported by the International Finance Corporation will support sustainable development.
Green bonds for sustainable development in the face of the climate crisis in Tanzania. This is the objective of CRDB Bank, the largest commercial bank in the country with $4.6 billion in assets under management in 2022. It has just issued a $68.3 million green bond. This is “the first tranche of the $300 million multi-currency medium-term note program under the new Green, Social and Sustainability Bond Framework aimed at financing green, social and sustainable development projects,” indicates the commercial bank based in Dar es Salaam.
The International Finance Corporation (IFC), the subsidiary of the World Bank group responsible for private sector financing, is supporting the operation by subscribing $20 million. “This tranche aims to address various climate challenges through the transformation of the country's climate finance processes, thereby improving the livelihoods and quality of life of our citizens through the sustainable development agenda,” explains Abdulmajid Mussa Nsekela, the CEO of CRDB Bank.
Concretely, the proceeds of this Tanzanian shilling bond are intended to finance sustainable development initiatives across the country, including climate-smart agriculture and the development of projects in the areas of water, forestry, renewable energies and ecological construction.
As part of this transaction, "SFI's support includes a performance-based incentive from the UK-SFI Market Accelerator Program for the Green Building Program to help cover costs associated with greening buildings." affordable housing developments in Tanzania” , indicates the subsidiary of the World Bank group. Under this UK-SFI program, at least 40% of the IFC's bond investment will be dedicated to green buildings.
CRDB Bank’s green bond contributes to Tanzania’s climate finance goals. The World Bank estimates that the East African country will need $19.3 billion by 2030 to meet its climate finance needs. For now, Tanzania gets most of its climate finance from donors. But, almost everywhere on the continent, the private sector is called for more action in the face of the climate emergency.