S c a l i n g U p B l e n d e d F i n a n c i n g o f W a t e r a n d S a n i t a t i o n I n v e s t m e n t s i n

WORLD WATER WEEKSTOCKHOLM, SWEDEN

August 28, 2016

K E N YAWORLD WATER WEEK

STOCKHOLM, SWEDENAUGUST 28, 2016

FIDELIS TAMANGANI

K E N YA

S c a l i n g U p B l e n d e d F i n a n c i n g o f Wa t e r a n d S a n i t a t i o n

I n v e s t m e n t s i n

DEVELOPMENTCHALLENGE

PRIVATE SECTOR LENDING

FINANCING GAP

SDG6: UNIVERSAL

WATSAN ACCESS BY

2030

UTILITIES

CHALLENGES TO COMMERCIAL LENDING FOR WATER

COST RECOVERY TARIFFMARKET INTELLIGENCE

ASSET OWNERSHIPPUBLIC ENTITY / GOV’T SHAREHOLDER

PRO-POOR CONCERNOPERATING ENVIRONMENT

HUMAN RIGHT

HIGH INTEREST RATES

CREATING AN ENVIRONMENT CONDUCIVE TO COMMERCIAL LENDING

KENYA

SECTOR REFORMS Kenya Water Act of 2002

Autonomous Water Service Providers

Independent Sector Regulator

Ring Fencing of Revenues

Stakeholder Engagement

Tariff setting methodology

Public investment in infrastructure

Strengthening of utility performance

CREATING AN ENVIRONMENT CONDUCIVE TO COMMERCIAL LENDING

INCENTIVES FOR PRIVATE INVESTMENT

RESULTS-BASED FINANCING GOVERNANCE

BENEFITSPRIVATESECTOR

INVOLVEMENT

CREDIT GUARANTEES

KENYA OBA FUND

LACK OF ACCESS TO FINANCE

GROWING POPULATION

INVESTMENT NEEDS

CHALLENGES

PROJECT STRUCTUREKenya OBA Fund

Project finance:OBA subsidies: 60%Commercial loans: 40%

IVA

repo

rts

to M

inis

try

of F

inan

ce

1

LOCAL COMMERCIAL

BANKS $16m

WATER SERVICES PROVIDERS

5

WSTFOBA SUBSIDY

($9.5m)3

4

HOUSEHOLDS

2

DEVELOP BANKING PROPOSALS

IMPROVING LENDER

KNOWLEDGE

ASSESSING UTILITY

CREDITWORTHINESS

TECHNICAL ASSISTANCE

LEVERAGES COMMERCIAL LOANS TO WATER SERVICE PROVIDERSOBA

DEVELOPMENT IMPACT

10

30,000 low-income house-holds to gain access to water and sanitation services

$9.5m subsidies to leverage $16m in private loan finance for county water service providers$2.4m technical and implementation work

OBA

SCALING UP