Chapter 6 | PROJECTS
The “Climate Smart Smallholder Dairy Transformation Project” (C-SDTP) is a nine-year, multi-partner initiative aimed at trans- forming Tanzania’s dairy sector into a more productive, inclusive and climate-resilient industry. Targeting 180,000 smallholder households, the project focuses on increasing milk production and farmer incomes by strengthening key value chain compo- nents, including breed improvement, veterinary services, milk collection infrastructure, feeder roads and market linkages. It also promotes climate-smart practices such as biogas use, solar-powered milk cooling and improved animal husbandry to reduce GHG emissions and enhance resilience to climate shocks. The project aligns with Tanzania’s Livestock Sector Transformation Plan and contributes to national food security, rural livelihoods and climate goals, with expected outcomes including a 30 percent in- crease in production and income for 90,000 households, the creation of nearly 6,000 jobs and adoption of sustainable practices by at least 60 percent of the participants.
Situation Analysis of Climate Impacts
lands, leaving less feed and water for cattle. These stress- ors directly threaten the dairy and livestock sector, which is a crucial subset of agriculture for livelihoods and nutrition. Tanzania’s livestock are predominantly kept by smallholders under extensive systems that are highly climate-dependent (e.g. reliance on rain-fed forage). Recurrent droughts have already been linked to livestock losses and reduced milk pro- duction in vulnerable regions. 23 According to the US ND-GAIN index, Tanzania is highly ex- posed to climate hazards particularly in the agriculture and water sectors. However, it has limited economic, governance and social readiness to implement adaptation solutions. Meanwhile the EU INFORM Risk Index says Tanzania has a moderate to high hazard exposure and vulnerability and that it must reinforce disaster preparedness and climate resil- ience, especially in the water, agriculture and energy sectors.
Tanzania faces significant and growing challenges from climate change across its economy and ecosystems. Climate models project steadily rising temperatures (about +1.2°C by 2050 on average) and increasing rainfall variability. 19 These changes translate into more frequent and intense extreme events, such as droughts and floods. Tanzania is already the most flood-affected country in East Africa, with major cities (especially low-lying coastal cities like Dar es Salaam) highly vulnerable to flash floods and inundation. 20 For ex- ample, an estimated 463 km 2 of urban area is at high risk of flooding from heavy rainfall and sea-level rise, exacerbated by encroachment on riverbanks and inadequate drainage. Droughts are likewise a recurring threat, particularly in the dry central and northern regions, leading to water shortages and reduced agricultural yields. 21 Shifting precipitation pat- terns and higher temperatures have also been linked to eco- logical changes such as the spread of agricultural pests and livestock diseases, posing further risks to food security and rural livelihoods. 22 Key sectors of Tanzania’s economy are highly climate sen- sitive. Agriculture, which employs about 65 percent of the workforce and contributes some 26 percent to the nation’s GDP, is largely rain-fed and extremely vulnerable to shift- ing rainfall and temperature patterns. Higher temperatures and more frequent heatwaves lead to heat stress on farm labor and animals, reducing agricultural productivity. In live- stock, heat stress causes lower growth rates, diminished milk yields, poor reproduction and even increased mortality. Like- wise, prolonged dry spells and decreased rainfall result in droughts that dry up water sources and degrade pasture-
The OPEC Fund’s contribution to Climate Resilience in Tanzania
Purpose of the Loan
The stated purpose of the OPEC Fund US$50 million loan for the project is to help finance the transformation of Tanzania’s dairy industry in a climate-smart and inclusive way. In essence, the loan underpins the project’s develop- ment objective to enhance the sustainability and profitabil- ity of the dairy sector, while improving livelihoods and food security in Tanzania by increasing dairy production and pro- ductivity. This involves strengthening all key nodes of the dairy value chain — from improving cattle breeds and ani- mal health services to expanding ancillary infrastructure like
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