United Republic of Tanzania - Development Policy Financing with Catastrophe Deferred Drawdown Option

active

The Development Policy Financing with a Catastrophe Deferred Drawdown Option Program financing is an International Development Association (IDA) credit of 300 million dollars (DPF of 100 million dollars and Cat DDO of 200 million dollars). The Tanzania DPF with Cat DDO introduces a comprehensive framework to (a) strengthen Tanzania’s disaster and health-related emergency preparedness and response (EP&R) systems, (b) integrate resilience and risk prevention across critical sectors, and (c) enhance economic resilience and establish a foundation for accessing global carbon markets. Prioritized by the Government of Tanzania and backed by robust analytical work, the program will address ongoing climate and disaster risks through reforms under three pillars. Pillar 1: Strengthening institutional and financial capacity for disaster preparedness and response aims to strengthen the organized disaster response capabilities of the health and DRM sectors. This pillar will increase human capacity within government systems for effective response; promote coordination between the health and DRM sectors in areas of preparedness and response; and operationalize response teams, enhancing readiness for both natural and health-related disasters. The pillar also promotes the establishment of flood early warning systems (FEWS) and decision support systems in key flood-prone basins to safeguard at-risk populations, improving disaster preparedness. The pillar will also support the allocation of additional dedicated resources to the Contingency Fund. Pillar 2: mainstreaming disaster risk management in key sectors aims to incorporate resilience and risk prevention principles into the planning, decision-making, and management of essential infrastructure and services. This ensures that current and future infrastructure investments in key sectors are risk-informed, contributing to long-term resilience against climate-related and natural hazards. Specifically, the pillar will support efforts to reduce risk-prone urban expansion through risk-informed urban planning and bolster the resilience of Zanzibar’s water and energy sectors. It will do this by enhancing the reliability of power infrastructure and supporting sustainable management of the island’s groundwater resources, informed by aquifer monitoring and preventing overextraction and contamination, and mitigating risks of saltwater intrusion. Pillar 3: enhancing economic resilience and establishing foundations for carbon market access aims to enhance Tanzania’s economic resilience by strengthening institutional, financial, and regulatory frameworks and enabling access to global climate finance through carbon markets. The pillar promotes fiscal transparency, sustainable investment, and accountability while integrating climate risk considerations into financial institutions’ decision-making to support adaptation, mitigation, and long-term resilience to climate-related disasters.