NAIROBI, Dec 21 (Reuters) – The World Bank has approved two separate loans worth about $1.14 billion combined to Tanzania to support its private sector, develop its commercial capital and fight effects of climate change, the bank said.

The first tranche of financing worth $750 million – called Development Policy Financing – is meant to finance reforms such as making business licensing faster and also broaden access to cheap credit to accelerate private sector growth, the bank said in a statement late on Wednesday.

The second lot of $385 million will go towards financing infrastructure and building institutions that will help Tanzania’s commercial capital Dar es Salaam to cope with the effects of climate change, the bank said.

“Tanzania remains very vulnerable to climate change and is limited in its preparedness to adapt and respond to the adverse impacts,” Nathan Belete, World Bank country director for Malawi, Zambia, Zimbabwe and Tanzania, was quoted as saying in the statement.

Out of the east African country’s 44.39 trillion Tanzanian shillings budget for 2023/24 (July-June) the government expects to borrow 2.1 trillion shillings from external sources.

World Bank’s loans typically carry low to zero interest with long repayment periods. (Reporting by George Obulutsa Writing by Elias Buryabarema Editing by Bhargav Acharya and Mark Potter)