KENYA: Financing Universal Access to Water Supply & Sanitation-Kenya Country Assessment (Component 1)
Providing access to safe water and sanitation for all is a high priority for Kenya and is outlined in their national development plan—Vision 2030, called for in Sustainable Development Goal 6, and Kenya’s National Water Strategy partly aims to support private sector participation and commercialization to finance and manage the provision of water supply and sanitation (WSS).
To help achieve this goal, Kenya adopted a policy to encourage both PPPs and commercial lending to supplement the resources available from the government and its development partners. However, before developing a long-term strategic plan for the WSS sector, it was important to determine the sector’s debt situation.
The activity was implemented under PPIAF’s global program on financing universal access to water supply and sanitation program and is targeted at developing opportunities for private sector investments in water and sanitation. PPIAF’s support specifically targeted helping Kenyan water utilities identify and cultivate opportunities to attract commercial financing. Its initial scope was to support the Nairobi Water and Sanitation Company to review and consolidate its debts to facilitate additional lending from commercial banks. This was later amended to include a sector-wide debt assessment of the concessionary and domestic debt levels in the WSS sector following the realization that the utility had hit its debt ceiling as well as facing governance challenges at the utility level.
The study included proposed changes to enable the government to improve its institutional and financing frameworks to address the current debt levels and improve the creditworthiness of water utilities in Kenya. It informs efforts aimed at enhancing the enabling environment for commercial financing, and facilitated transactions and knowledge sharing in order to increase the level of domestic commercial financing in the water and sanitation sector in Kenya.
As a result, the study established the current debt level and reconciled it with other records, including those at the Debt Management Office at the National Treasury. It also reviewed the current financial statements of the water supply companies that are likely to be able to access commercial finance from different sources including commercial and concessional sources.
PPIAF’s activity supported programs with the World Bank's Water Global Practice and is closely linked to the practice’s output-based aid program implemented by the Global Program for Results Based Approaches (GPRBA).