Local governments need green finance for climate-resilient cities

DAR ES SALAAM: AS Tanzania continues to urbanise, local governments are increasingly becoming the frontline institutions in responding to climate change.

Cities such as Dar es Salaam, Dodoma, Mwanza, Arusha, Mbeya, Morogoro and Tanga are experiencing more frequent flooding, prolonged droughts, rising temperatures, mounting waste management challenges and growing pressure on public infrastructure.

These climaterelated risks threaten economic growth, public health and the quality of life of millions of citizens.

The critical question is: Who will finance the transformation of Tanzania’s cities into climateresilient and environmentally sustainable urban centres? Building climate-resilient cities requires substantial investment in resilient roads, modern drainage systems, green public transport, renewable energy, urban forests, wastewater treatment, flood control infrastructure and climatesmart housing.

Yet most Local Government Authorities (LGAs) continue to rely heavily on transfers from the central government, while their own-source revenues remain insufficient to finance such long-term investments. Green financing presents an important opportunity to bridge this funding gap.

Green finance refers to financial resources directed towards projects that deliver environmental benefits while supporting sustainable economic development.

These resources may come through green bonds, climate funds, concessional loans, publicprivate partnerships, carbon markets and private-sector investments in environmentally sustainable infrastructure.

Across the world, cities are increasingly using innovative financing mechanisms to fund climate adaptation and mitigation initiatives.

Municipal green bonds have financed clean transport systems, energy-efficient public buildings and flood protection infrastructure in many countries.

International climate funds also provide grants and concessional financing for urban resilience projects.

Tanzania can learn from these experiences while developing financing models suited to its own institutional and economic realities.

However, accessing green finance is far from automatic. Many local governments face institutional, technical and financial constraints that limit their ability to prepare bankable climate projects.

Weak project preparation, inadequate climate data, limited financial management capacity and insufficient understanding of international funding requirements often prevent LGAs from competing successfully for available climate finance.

Addressing these challenges requires coordinated action at multiple levels.

First, the central government should establish a supportive policy and regulatory framework that enables qualified local governments to access green financing instruments directly or through national financing facilities.

Strengthening fiscal decentralisation would also provide local authorities with greater flexibility to mobilise and manage development resources. Second, capacity building must become a priority.

Local government officials require practical skills in climate risk assessment, project preparation, environmental safeguards, financial modelling and monitoring climate investments.

Universities, research institutions and development partners can play a critical role in strengthening this technical capacity.

Third, partnerships with the private sector should be expanded. Public-private partnerships can mobilise additional capital for renewable energy, waste recycling, water supply, green buildings and sustainable transport infrastructure.

At the same time, financial institutions should develop financing products specifically designed to support climate-resilient urban investments.

Digital technologies can further enhance transparency and accountability in the management of green finance.

Geographic Information Systems (GIS), digital monitoring platforms and open financial reporting can improve project oversight, strengthen public confidence and provide investors with greater assurance that climate funds are being used effectively.

Community participation is equally essential. Residents should be actively involved in identifying local climate priorities, monitoring project implementation and promoting sustainable environmental practices.

Climate resilience cannot be achieved through infrastructure alone; it also depends on informed and engaged communities that protect natural resources, reduce pollution and support sustainable urban planning.

The private sector, civil society organisations and international development partners all have important roles to play.

Nevertheless, local governments must remain at the centre of climate action because they best understand local vulnerabilities and are responsible for delivering essential public services.

As Tanzania advances its long term development ambitions under Vision 2050 and pursues sustainable urbanisation, investing in climate-resilient cities should become a national development priority rather than merely an environmental objective.

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Green financing offers an opportunity not only to reduce climate risks but also to stimulate innovation, create green jobs, improve public services and attract sustainable investment.

Ultimately, the future of Tanzania’s cities will depend not only on the availability of funding but also on the ability of local governments to mobilise, manage and account for green finance effectively.

The question is therefore no longer whether climate-resilient cities are affordable. It is whether Tanzania can afford to delay investing in them.