ARUSHA: TANZANIA has taken a major step towards financing forest and landscape restoration in the country with the launch of the Capitalisation of Financial Instruments (CFI) Pilot Project. CFI is an initiative led by the Food and Agriculture Organisation of the United Nations (FAO).
The pilot programme is implemented in collaboration with the local communities, Forest and Farm Producer Organisations (FFPOs); Small and Medium Enterprises (SMEs); Government and Financial institutions.
It builds on years of work under the Forest and Farm Facility (FFF), a global partnership programme that strengthens FFPOs to improve governance, climate resilience, sustainable entrepreneurship including access to finance and markets.
Since 2020, the Ministry of Natural Resources and Tourism has served as the focal point for FFF programme implementation in Tanzania, supporting community-based producers to contribute to national restoration and climate resilience goals.
However, despite their central role in managing forests, farms and landscapes, many FFPOs remain locked out of formal finance.
They often lack traditional collateral, operate within longer production cycles and face climate-related risks that do not fit conventional banking models.
As a result, restoration efforts struggle to scale due to limited investment. Speaking at the launch in Arusha, FAO Representative in Tanzania Dr Tipo Nyabenyi, said the CFI pilot is designed to bridge this financing gap.
“We are moving from matchmaking to mechanism, from conversation to capitalisation,” she said.
“Restoration cannot scale up without appropriate financing mechanisms. This pilot complements technical assistance with structured financial engagement.”
Through the CFI, FAO will work with domestic financial institutions to deploy risk-sharing and capitalisation mechanisms that reduce perceived lending risks while strengthening the bankability of restoration enterprises.
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Tanzania is among the first countries globally to pilot this innovative instrument, signalling its leadership in restoration finance.
Permanent Secretary in the Ministry of Natural Resources and Tourism, Dr Hassan Abbas, reaffirmed the Government’s commitment to innovative financial solutions aligned with national priorities.
He was represented by Dr Joseph Makero, Principal and Researcher at the Forestry Training Institute, Arusha.
“Forest and farm producers are central to Tanzania’s food security, climate resilience and sustainable land management,” he said.
“This pilot introduces a blended finance model combining capitalisation, risk-sharing and technical assistance to ensure small producers gain direct and inclusive access to finance.”
On her side, speaking on behalf of financial institutions and banks that participated at the event, Managing Director of the CRDB Bank Foundation, Ms Tully Mwambapa, underscored the economic potential of restoration-linked enterprises.
“Restoration is not only an environmental obligation; it is an economic opportunity,” she said.
“When you combine financial literacy, structured mentorship and patient capital, risk reduces, repayment improves and enterprises become sustainable.”
Also speaking at the event, Jhony Zapata Andia, Senior Forestry Officer and Tanzania Lead Technical Coach of the Forest and Farm Facility (FFF) Programme, based at FAO Headquarters in Rome, Italy, underscored the global significance of Tanzania’s leadership and its exemplary role in advancing sustainable forest and farm management.