Over 150,000 Kenyans living in low-income urban areas are set to benefit from improved access to water and sanitation after World Bank approved a Ksh1.2billion (US$11.8 million) funding to help expand the residents’ access to clean water.
The global financier acting as administrator for the Global Partnership on Output-Based Aid (GPOBA) inked the deal with the Kenyan government with an aim of reaching out to 30,000 low income urban residents. The project, which will be community-managed, will be extended later to 190,000 beneficiaries after the pilot one has been concluded.
“This is a significant step toward bringing more water and sanitation services to the poor, and demonstrates the Kenyan government’s confidence in the output-based approach, using resources from the public and private sectors,” said Diariétou Gaye, World Bank Country Director for Kenya.
The project is facilitated with funding from the Swedish International Development Cooperation Agency (Sida), and will be managed by the Water Services Trust Fund of Kenya (WSTF). It will help water service providers access loan finance from commercial banks to invest in water and sanitation subprojects, with subsidies covering up to 60 percent of the cost of providing services to low-income households.
“We look forward to working with the World Bank and the Government of Sweden as development partners in this innovative financing scheme to bridge the public funding gap. Together and within the framework of devolved structures in our counties we can work toward improving the lives of underserved communities and making Kenya Vision 2030 a reality,” noted WSTF CEO Ismail Fahmy Shaiye.
Output-based aid is an innovative approach to development financing, where payment is linked to performance. Under the Kenya agreement, water service providers will not receive the subsidy until water and sanitation services are functional and reach the target group.
“This project will help water service providers access commercial credit to expand water and sanitation services to poor urban areas, reducing the connection fee and increasing access for poor urban households,” explained GPOBA Manager Carmen Nonay.
Kenya Vision 2030 includes universal access to water and sanitation as one of its goals by the year 2030. Rapid population growth and accelerating urbanization present growing challenges for developing countries in these sectors, where the cost of connecting to water and sanitation services is prohibitive for the poor. As previous grant agreements for water and sanitation have centered on the Nairobi areas, the capital city is not included under the terms of this project.