Tanzania Secures $997,000 AfDB Grant to Expand Climate Insurance for Farmers

The project, titled “Bridging the Agricultural Risk Protection Gap to Scale Climate Smart Insurance,” is expected to benefit 300,000 farmers across 15 regions of Tanzania.

Tanzania is set to expand agricultural insurance coverage for smallholder farmers following a $997,000 grant agreement between the African Development Bank Group and Agriculture and Climate Risk Enterprise (ACRE Africa). The funding, provided through the Africa Digital Financial Inclusion Facility (ADFI), will help farmers protect their livelihoods against growing climate-related risks, including unpredictable weather conditions that can damage crops and reduce agricultural incomes. The initiative will introduce digital insurance solutions and financial services designed to make agricultural protection more accessible to rural communities facing difficulties obtaining traditional insurance coverage.

The project, titled "Bridging the Agricultural Risk Protection Gap to Scale Climate Smart Insurance," is expected to benefit 300,000 farmers across 15 regions of Tanzania. Its focus includes improving access to climate risk insurance, strengthening agricultural productivity and expanding financial opportunities for women and young people who contribute significantly to the country's agricultural workforce. Farmers participating in the programme will gain access to insurance services supported by digital technologies, making it easier to manage agricultural risks and recover from financial losses caused by climate-related events.

ACRE Africa, headquartered in Kenya and operating through offices in six African countries, provides agricultural risk management services that help farmers protect their businesses and improve their financial stability. Its services include access to agricultural credit, farming inputs, training, advisory support, insurance coverage and market connections that can strengthen farmers' economic opportunities. The new partnership with the African Development Bank will build on these activities by expanding insurance access and introducing financial solutions suited to the needs of smallholder farming communities.

Digital Insurance Services to Protect Farmers from Climate Risks

The project will develop digital systems to simplify farmer registration, insurance premium collection, agricultural monitoring and claims processing, making insurance services easier to access and manage. These improvements could reduce administrative difficulties for rural farmers who often have limited access to formal financial institutions and face challenges understanding or obtaining suitable insurance products. Digital tools will also support insurance providers in monitoring agricultural conditions and processing claims more efficiently, helping farmers receive financial assistance following covered losses.

Insurance services will be distributed through community-based agents and partnerships with financial institutions, agricultural input suppliers and businesses that purchase farmers' produce. These distribution networks will help connect farmers with insurance products and complementary financial services through organisations already involved in agricultural activities. The combination of insurance, financial support and agricultural technologies is expected to strengthen farmers' ability to manage risks, maintain production and make better investment decisions.

ACRE Africa CEO Ewan Wheeler highlighted the importance of combining digital agricultural insurance with data analytics to help farmers and businesses make informed decisions. He explained that the partnership with ADFI will support the expansion of innovative insurance products and improve financial inclusion among Tanzania's farming communities. Better information about agricultural risks could also help financial institutions, insurers and other businesses provide services that respond more effectively to farmers' needs.

Women and Young Farmers to Benefit from Financial Inclusion

The programme places particular attention on women and young people, recognising their important contribution to agricultural production and the financial challenges they experience when seeking insurance and other services. Many smallholder farmers depend heavily on seasonal agricultural income, leaving their households vulnerable when extreme weather damages crops or interrupts production. Expanding access to affordable insurance could help protect household finances, reduce the economic impact of agricultural losses and encourage investment in more productive farming activities.

Alex Mubiru, Director General of the African Development Bank Group's East Africa Regional Office, described the partnership as an important step toward protecting smallholder farmers and strengthening their resilience against climate risks. He emphasised that development initiatives must reach communities across different income groups, geographic locations, ages and genders, particularly people who have traditionally been excluded from financial services. Digital finance offers an opportunity to address these inequalities by connecting underserved agricultural communities with insurance products and financial protection.

$1.43 Million Investment Supports Tanzania's Agricultural Development

The grant agreement was signed on 28 October 2026 at the African Development Bank's East Africa Regional Office in Nairobi, Kenya, bringing together representatives of the Bank and ACRE Africa. The $997,000 contribution from ADFI will be complemented by an in-kind contribution of $437,000 from ACRE Africa, bringing total project financing to approximately $1.43 million. The combined investment will support the expansion of climate-smart insurance services and digital financial systems designed to improve agricultural resilience and financial inclusion.

The initiative supports Tanzania's National Financial Inclusion Framework 2023–2028 and the Tanzania Development Vision 2050, which identify broader access to financial services and sustainable economic development as national priorities. It also aligns with the African Development Bank Group's Climate Change and Green Growth Framework, strengthening efforts to help agricultural communities manage environmental risks and improve productivity. These policy connections reflect the importance of making climate protection and financial services more accessible to farmers who depend on agriculture for their livelihoods.

The African Development Bank Group has maintained a substantial development partnership with Tanzania since 1971, mobilising nearly $10 billion for more than 170 projects and programmes across the country. Its investments have supported important sectors including transport, agriculture, energy, social development and financial services, contributing to infrastructure expansion and wider economic opportunities. The new insurance initiative adds to these efforts by helping smallholder farmers strengthen climate resilience, protect agricultural incomes and build more sustainable livelihoods.