INNOVATIVE GREEN FINANCING IN TANGA, TANZANIA

Tanga, an agricultural region in northeastern Tanzania, faces growing pressure on its water and sanitation systems. With a population exceeding 2.6 million (2022 national census), rapid urbanization fueled by rural-urban migration strains existing infrastructure. Limited government resources add to this challenge and reflects the struggles of many East African urban centers alike.

The Tanga Urban Water Supply and Sanitation Authority (Tanga UWASA) plays a critical role in treating, distributing, and ensuring access to clean water for urban residents in Tanga city, Pangani, and Muheza townships. Wastewater collection and safe disposal also fall under their scope.

In 2024, Tanga UWASA, Tanzanian Government, UNCDF, and NBC Bank issued a debt instrument of TZS 53.12 billion ($20.8 million) called “Tanga Water Green Bond” to finance environmentally beneficial projects – the first of its kind in East Africa.

(Credit: UNCDF)

The need for local governments in East Africa to explore alternative financing avenues has become increasingly urgent. National government transfers to local entities have been declining in many countries, hindering their ability to meet development needs.

During the 8th Regional Forum on Local Economic Development in Cross-Border Communities (Arusha, Tanzania), UNCDF emphasized the importance of capacity building and identifying alternative funding mechanisms for cities and local governments. The Tanga Water Green Bond exemplifies such an alternative, alleviating government burdens and helping deliver public services.