Dar es Salaam — THE Tanzania Agricultural Development Bank (TADB) has taken a pioneering step in climate finance, becoming the first bank in the country to conduct full climate stress testing. The initiative follows a six-month technical assistance project supported by the African Development Bank (AfDB), the Global Center on Adaptation (GCA), and technical experts from Adelphi, aimed at strengthening TADB's internal systems for climate risk assessment and management.
Unveiling the results in Dar es Salaam, Derek Apell, AFAC Coordinator at AfDB, said the project represents a major advance in aligning financial institutions in Africa with sustainable development and climate resilience. "As banks such as TADB adopt climate risk screening for their clients, it will create incentives for corporate players and private borrowers to implement adaptation measures. This will in turn drive increased investment in climate resilience, which the continent urgently needs to meet its climate goals," Apell noted.
TADB's Managing Director, Frank Nyabundege, emphasized the uniqueness of the partnership with AfDB, GCA, and Adelphi. "This project enables us to evaluate and manage climate-related risks in agriculture financing, reinforcing TADB's role as Tanzania's premier development finance institution in agriculture," he said.
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According to Hawaii Abdulla, TADB's Principal Strategic Planning Officer and Climate Change Lead, the support came at the right time. "It allows us to assess climate risk exposure within our lending portfolio and equips us with tools to profile clients for climate risk, thereby supporting strategic adaptation measures across the agriculture sector," she explained.
Thierry Senechal, Managing Director of Finance for Impact, said the tools developed allow banks to assess acute and chronic physical risks, as well as transition risks, and simulate their impacts on profitability, capital ratios, and liquidity. "TADB is a front runner because it is the first bank in Tanzania to conduct a full climate stress test, running simulations that demonstrate the potential impact of climate risks on financial performance," he said.
AfDB's Rita Effah, Senior Climate Officer and ACCF Coordinator, highlighted that the Africa Climate Change Fund, established in 2014, has been instrumental in providing grants for capacity building and creating enabling environments for climate finance. "Through this initiative, we are ensuring that by 2030 financial products and instruments align with Africa's sustainable and climate-related goals," she said.
Adele Cadario, Program Lead at GCA, noted that the ultimate beneficiaries will be local entrepreneurs and smallholder farmers. "Domestic banks like TADB can seize market opportunities to invest in adaptation, helping scale resilience for communities, businesses, and the national economy," she said.
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With agriculture being the backbone of Tanzania's economy, this pioneering project places TADB at the forefront of integrating climate risk management into financial systems, setting a benchmark for other institutions across Africa.
