Tanzanian start-ups are crucial in combating climate change, particularly through innovative uses of seaweed for bio-stimulants and biodegradable materials.
However, they face financial hurdles due to a lack of investment and structural mismatches in global finance.
Bridging these gaps with blended finance and policy reforms could unlock their potential and enhance climate resilience.
Under a blazing mid-morning sun on Zanzibar’s Jambiani coast, Rabia Hussein Ali leans into the wind. The tide is surging quickly. With cautious steps, she wades into the knee-deep water.
Her hijab, damp with sea spray, frames a face weathered by salt and sun. Behind her, polyethylene ropes heavy with seaweed scrape across the coral and sand. She grips them firmly and braces against the current. “It’s hard work,” she said. “But this is what feeds my children.”
Ali, a seaweed gather like many other women in Zanzibar, begins before dawn, when the heat is gentler. By mid-morning, the humidity is thick enough to taste and the sun unforgiving. Still, she works methodically, hauling rope after rope wrapped with seaweed toward the shore. Her hands, toughened by years in the ocean, move quickly but precisely — one slip could waste a week’s growth.
Scattered across the horizon, other women in bright hijabs bend over their plots, their lines of green and brown seaweed etching faint patterns against the Indian Ocean’s panoramic blue.
For decades, women along Zanzibar’s shores have collected seaweed by hand, drying it under the brutal sun for a small profit. Now those same green strands are being recast as a strategic asset. Coastal Biotech, a Tanzanian start-up, is turning seaweed into bio-stimulants — natural fertilisers and compostable materials that enrich soil, reduce farmers’ reliance on chemicals and help crops endure erratic weather.
Its polymers are also being fashioned into biodegradable substitutes for plastic, hinting at a broader industrial future for what was once a humble coastal harvest.
“We saw firsthand how degraded soils and unpredictable rainfall were impacting productivity, and how our seaweed-based bio-stimulants helped improve crop resilience,” said Steven Sillah, director of business at Coastal Biotech. “We realised that we weren’t just building a biotech product, but a climate adaptation tool.”
Tanzania’s vulnerability is vivid. Agriculture makes up 24 per cent of its gross domestic product and employs 66 per cent of its workforce, leaving the country dangerously exposed to drought spells, floods and erratic weather.
A 2024 report by FSD Africa ranked Tanzania the 45th most vulnerable country to climate change worldwide. IMF calls it the 58th least prepared to mobilise adaptation investment.
“Adaptation is by definition community-based, decentralised and context-specific,” said Ayoub Derdabi, a climate finance specialist at Climate KIC, a Europe-based climate innovation agency. “Investors, therefore, perceive it as difficult to scale and to deliver predictable financial returns.”
The blue economy — sustainable use of ocean resources — offers hope. the Organisation for Economic Co-operation and Development estimates it could be worth $3.2 trillion by 2030, yet Tanzania is missing out.
Even after COP29’s grand pledge of $1.3 trillion for climate finance by 2035, the money isn’t reaching the frontlines.
Coastal Biotech bootstrapped its early research with personal savings and tiny grants but is finding it difficult to scale.
Tanzania sits at a crossroads of vulnerability and potential. But investment flows elsewhere — to Kenya, Nigeria or South Africa — where ecosystems are better known and capital markets more mature.
Larry Ayo, a Tanzanian innovation strategist and director at SmartLab, said: “Tanzania’s startup ecosystem is still growing but lags behind Kenya and Nigeria in maturity, investor engagement, and deal size. Regulatory bottlenecks, like six-month approval delays and high fees from the Fair Competition Commission, scare off small investors. And most climate funds operate regionally from Nairobi — they don’t have boots on the ground here.”
Banks demand collateral that small innovators can’t provide. Transaction costs make small deals unattractive. Tax policies sometimes require payment before revenue starts flowing in.
“It’s a structural mismatch baked into global finance,” Derdabi says. “While solar farms or electric vehicles plug easily into carbon markets and established pathways for fast, scalable returns, adaptation’s benefits — stronger villages, fewer floods and reduced risk — rarely translate into quick profits.”
Solutions exist. Derdabi pointed to blended finance as a promising bridge. “Blended finance can combine grants for research and development with equity or revenue-based finance for scaling up solutions,” he said. “What people are starting to understand now is that the more we invest in adaptation solutions early on, the less we are going to eventually have to spend on reconstruction in the future.”
Funds like Charm Impact Fund, Aceli Africa, and facilities like CRDB Bank & Global Climate Fund are already showing how concessional capital can mobilise commercial investment while providing technical support.
SmartLab, through Climate KIC’s Adaptation Innovation Cluster, is teaching founders to reframe their work. “We translate adaptation into investor language — ‘risk mitigation,’ ‘yield stability,’ ‘climate insurance proxy’ — so financiers can see it as de-risking innovation,” Ayo explained.
They’re also designing pathways that connect grant-funded ventures to follow-on investment, and creating demo days to put Tanzanian innovators in front of funders.
Tanzania’s government has made progress improving its business climate, but obstacles remain. High transaction costs, bureaucratic delays, and pre-revenue taxation stifle early ventures.
“Tax reforms could eliminate or defer taxes at the pre-revenue stage and introduce incentives for angel investments in climate adaptation,” Ayo suggests. “Simplifying the equity approval process or exempting seed-stage investments from hefty fees would unlock capital flows. And a Startups Act—like those in Tunisia or Kenya—would send a powerful signal that Tanzania backs its entrepreneurs.”
Such steps would align neatly with Tanzania Development Vision 2050, which names innovation and climate resilience as economic pillars.
Beyond policy and finance, Sillah believes trust is just as critical.
“The most important lesson is that trust and adoption cycles are built through relationships, not just products,” he said. “Farmers want to see results in their own soils and with their own crops before committing, which is why our cooperative-driven model is so powerful. We also learned that affordability and timely access matter as much as performance. By aligning sales cycles with planting and harvesting seasons, we increase adoption and reduce the risk of product abandonment.”
Farmers like 65-year-old Zuhura Kessy in Zanzibar agree. “Last season my maize survived a dry spell when my neighbour’s failed,” she said. “If I can depend on this, I can feed my children.”
There’s reason for hope. Over 60 per cent of Tanzanian start-ups in 2024 were founded by youth under 30. More than half had women co-founders. Young entrepreneurs are using AI for crop insurance, IoT sensors for early-warning systems and locally adapted solar irrigation kits.
“These trends show a tech-savvy, gender-inclusive generation eager to solve problems rooted in their communities,” Ayo said.
Climate KIC and partners like SmartLab are proving that with mentorship, assessment tools and investor education, adaptation ventures can gain credibility. Over the past year, they’ve piloted an Adaptation and Resilience Innovation Assessment and Validation Tool, giving start-ups the metrics and language to pitch effectively. “The validation certificate helped them position themselves and confidently spell out their strengths,” Derdabi said.
The message for investors is clear: Climate adaptation isn’t charity — it’s smart risk management. For governments, it’s a chance to align policy with Vision 2050. And for Tanzania’s farmers, it’s survival.