UNCDF in Tanzania
East and Southern Africa and the Arab States Region
Loans
Guarantees
Investment grants
Our work
Tanzania is one of Africa’s fastest-growing economies but continues to face financing gaps in local infrastructure, climate resilience, finance for micro, small and medium-sized Enterprises (MSMEs), and digital inclusion. UNCDF’s blended finance and market-building approach helps mobilize domestic and international capital to address these gaps.
The United Nations Capital Development Fund, in close collaboration with national authorities and development partners, is catalysing economic growth, unlocking investment, and creating job opportunities in Tanzania. Through innovative financing models, UNCDF enabled the country’s first sub-national green bond, boosting financial inclusion and digital transformation, advancing clean energy provision, and empowering small businesses and entrepreneurs.
Tanzania’s first sub-national Green Bond
UNCDF, in partnership with the Government of the United Republic of Tanzania, spear-headed the country's first sub-national bond issuance: the Tanga Water Infrastructure Green Bond. This landmark initiative is part of the government’s Alternative Project Financing strategy and marked East Africa’s first sub-national green bond. With $1 million in catalytic support from UNCDF, the bond unlocked $20.8 million in local currency—65 percent from domestic investors—achieving a leverage ratio of 1:20. This initiative is expected to improve access to clean water for the population of Tanga—458,395 people—by enhancing the quality of service, with 26,000 people projected to gain access to clean water for the first time before end 2026. The bond has since been cross-listed on the Luxembourg Green Exchange (LGX), setting a precedent for domestic capital market development.
Laying pipelines for water in Tanga. Photo: UNCDF.
Maimuna Yusuph, a Tanga Resident. Photo: UNCDF.
Advancing clean energy access through results-based financing
With €19.4 million from the European Union, and in collaboration with the Government of the United Republic of Tanzania, the Food and Agriculture Organization, and the United Nations Industrial Development Organization, UNCDF contributed to Tanzania’s clean energy transition through the CookFund Project. From 2021 to date, the programme has delivered tangible and transformative results, contributing to the creation of 27,000 jobs, both direct and indirect, while supporting nearly 5,000 businesses along the clean cooking value chain. It has reached over 480,000 households, expanding access to cleaner and more efficient cooking solutions, and helped avoid 3,900,000 tonnes of CO₂ equivalent emissions. These achievements underscore the programme’s significant contribution to sustainable development, improved livelihoods, and climate action in Tanzania.
Cleaner cooking solutions for over a million people with the Cookfund Project. Photo: UNCDF.
A delivery agent of a UNCDF-supported fintech startup hands over a medical package to a customer in Tanzania, highlighting how digital innovation is expanding access to essential services through the PesaTech accelerator programme. Photo: MedPack
Unlocking investment for start-ups and entrepreneurs
PesaTech is UNCDF’s flagship accelerator programme in Tanzania, launched in 2022 to strengthen the fintech ecosystem and promote financial inclusion. With PesaTech, UNCDF supports post-revenue fintech startups with catalytic funding, investment readiness support, and partnership facilitation to help them accelerate growth and scale their solutions. PesaTech has supported 22 startups, unlocking over $13 million in investment and facilitating more than 100 partnerships with financial institutions, corporations, and investors. The initiative has also contributed significantly to the creation of new jobs, with one startup creating 982 new jobs in 2024 alone. Collectively, the supported startups have served over 1.7 million users, helping individuals and businesses across Tanzania access financial services through digital platforms, building a dynamic, inclusive, and sustainable digital economy.
Advancing locally led adaptation through performance-based grants
UNCDF advances locally led climate adaptation in Tanzania through Performance-Based Climate Resilience Grants (PBCRGs), delivered via the LoCAL Facility under Tanzania’s Local Climate Finance Initiative (LCFI). By end-2023, the first grant cycle was successfully completed in Chamwino, Mpwapwa, and Kondoa districts, verified by an Annual Performance Assessment. This unlocked USD 12.3 million to scale up to investments expanding LoCAL to 18 new coastal districts, with eight set to receive grants in 2025/26. PBCRGs strengthen fiscal decentralisation while embedding climate resilience into local public finance systems.
Supported by EU, Belgium, Ireland, and Norway, LoCAL is now embedded in Tanzania’s National Climate Change Response Strategy 2021–2026. UNCDF assists the President’s Office – Regional Administration and Local Government in pursuing Green Climate Fund accreditation and supports the National Environment Management Council in preparing an Adaptation Fund proposal.
Under guidance from the Vice President’s Office, a Climate Risk and Vulnerability Assessment is underway to ensure risk-informed, climate-resilient planning and budgeting across all 21 LoCAL-implementing districts.
Community members in Ksisi, Mpwapwa District. Photo: UNCDF.
Driving digital financial inclusion
The Tanzania – Inclusive Digital Economy (TIDE) project, supported by the European Union through the Digital 4 Tanzania initiative (D4T) is accelerating the country’s digital transformation. The project, launched in 2022, focuses on two key outcomes: improving access to and usage of digital financial services through open payment systems and strengthening Tanzania’s innovation ecosystem to support local entrepreneurs. Policy and regulatory engagement underpin both areas, contributing to sustainable and inclusive digital growth.
Building on the achievements of TIDE, UNCDF launched the Tanzania Angel Accelerator in 2024, investing $50,000 in donor funding to train 20 angel investors (40% women) .By the end of the programme the newly trained angels had made $60,000 in investments, unlocking an additional $300,000 from impact funders within 6 months.
Also in 2024, UNCDF trained 53 microfinance institutions on digital adoption, enhancing operational efficiency, and expanding access to financial services for underserved populations. Through D4T-TIDE, UNCDF is contributing to the Government of Tanzania’s national development plan and the broader UN Sustainable Development Goals.
Across these initiatives, the United Nations Capital Development Fund continues to deploy innovative finance solutions to drive sustainable development and economic resilience in Tanzania.
Latest news and stories
Our partners
UNCDF’s work in Tanzania is made possible thanks to collaboration with: Bamboo Capital Partners, European Union, Food and Agriculture Organization of the United Nations (FAO), Government of Belgium, Government of Ireland, Government of Norway, Government of Tanzania, Luxembourg Green Exchange, Government of the United Kingdom, United Nations Development Programme (UNDP), United Nations Environment Programme (UNEP), United Nations Industrial Development Organization (UNIDO) and World Food Programme (WFP).
Documents
This section brings together key documents related to UNCDF’s work in the country. It includes a curated selection of publications, papers, and reports that reflect the scope of engagement at country level, from programme design to implementation and outcomes.
These documents offer additional context on how initiatives are developed and delivered, and how partnerships contribute to advancing national priorities. They are intended to support transparency, facilitate knowledge sharing and serve as a practical resource for partners, stakeholders and others seeking a deeper understanding of UNCDF’s work.
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Contact us
For inquiries about UNCDF’s work in Tanzania, including partnerships, investment opportunities, or ongoing initiatives, please contact our team at esaa.region@uncdf.org.
