Nairobi, December 6, 2006—The World Bank has provided a grant of US$1,151,300 to assist communities’ investment in water infrastructure and help the country to reduce poverty and reach the Millennium Development Goals (MDGs).

The grant, funded by the United Kingdom’s Department for International Development (DFID) and the World Bank’s International Finance Corporation (IFC) under the Global Partnership for Output Based Aid (GPOBA) administered by the World Bank, is being made available to partially finance community water projects after extensive consultation with the Ministry of Water and Irrigation, the Athi Water Services Board, and other government agencies. K-Rep Bank Ltd, a leading commercial bank specialized in providing access to finance to the poorest in the country, will administer the grant.
 
Kenya‘s community water projects face a number of challenges, including inability to access finances to develop their infrastructure and reduce poverty in their areas. This grant will be a catalyst in increasing the communities’ access to financial services on a pilot scale and set the stage for learning that will lead to national level programs in the future.

“This grant will increase the voice of the poor and help them to make their own decisions about  the services delivered to them,” said Colin Bruce, World Bank Country Director for Comoros, Eritrea, Kenya, Seychelles and Somalia, during the signing ceremony today between the World  Bank and K­Rep Bank in Nairobi.

“The use of innovative subsidies to promote transparency and accountability in operations is of key interest to the World Bank globally and this project, by involving the private sector, will help  to do that,”  said  Mr. Bruce during  the  signing  ceremony, which was  witnessed  by Kenyan  Government officials representing  the  Ministry of Water  and  Irrigation  and  the  Athi Water  Services Board.

The grant will target about 20 community water projects in the Athi Water Services Board area  and will help them to access loans for infrastructure development. It will also assist in capacity  building of the communities who opt to develop their infrastructure.

The  Government of Kenya’s Water  Act of 2002 emphasizes the  importance of private sector engagement in water  provision and highlights the  need  for water  services to operate  on a  sustainable basis. One key feature of sustainability is that water supplies should be able to pay  the costs of their operations and maintenance.

The specific objectives of the grant include to: 

• Facilitating the provision of loan financing to small water projects – where other financial  resources are not available, there is the capacity to pay back loans and there is interest from  the project membership in taking a loan; 
• Catalyzing  the  creation  of support services for small water  providers that add  capacity to  small providers’ operations and help to increase their sustainability.

”Small water providers need access to credit finance to develop their businesses, and with these  loan funds, customers of the water providers will benefit from increased access and quality of water services,” said  Kimanthi Mutua,  Managing  Director of K­Rep Bank  Ltd  at  the signing  ceremony in Nairobi.

The pilot project will finance up to 40% of the total investment cost of new or expansion projects for water supply infrastructure in the five districts of Athi Water Service Board’s jurisdiction—  Kiambu, Thika,  Machakos, Makueni and  Kajiado. Communities which have  expressed  their interest in taking out a loan to finance their projects, and who meet the credit requirements of K­ Rep Bank will be eligible for the grant.

The grant will be paid to the community projects when  they have successfully finished their project and will be used to reduce the total loan amount. The grant will also provide a fixed subsidy amount to each community participating in the pilot  to hire  expert engineering  and  financial skills to  assist in project  implementation  and  then  manage it well after its implementation.

Early investigations used  to develop  this project were  financed  by the  World  Bank’s Public­  Private Infrastructure Advisory Facility (PPIAF) and were managed by the Water and Sanitation  Program ­Africa (WSP­Af), a global program administered by the World Bank.

K­Rep Bank was considered to implement the  grant due  to its history of commitment to  providing  financial services to  the  country’s poor and  also its engagement in exploring  the  possibility of such innovative  financial support  to the  water sector. K­Rep’s extensive  engagement with IFC in  other  activities has demonstrated its capacity to develop  and  provide  innovative services to its clients. Within K­Rep Bank, key senior staff has been assigned to the  management of this project.

For more information on the World Bank’s work in Kenya visit: 

http://www.worldbank.org/ke

25 May, 2010 --- Africa Day, on May 25, is the annual commemoration of the 1963 founding of the Organisation of African Unity (OAU), now called the African Union (AU).

Many things have changed on the continent since 1963, some for the better. In fact, the Office of the Chief Economist for Africa at the World Bank recently published a collection of success stories titled simply, Yes Africa Can. In a recent speech at the Harvard Kennedy School, World Bank MD Ngozi Okonjo-Iweala spoke about many positive indicators for the continent's development and argued that it is time to reposition Africa as a destination for investment, not just aid.

May 3, 2010 -- An innovative project is increasing access to clean and reliable water supply for rural communities in Kenya, using a blend of commercial finance and an output-based subsidy. The project is helping small community-based water providers access the finance they need to improve water systems and connect poor households to piped water supply.

Access to rural water supply remains low in Kenya. In particular, access to piped water has only increased from 9 to 10 percent of rural households over the past eight years.

Small community-based water providers are seen as part of the solution and are supported by the Water Sector Act of 2002, which introduced regulatory and tariff reforms.

However these small water projects lack funding, especially to improve existing systems.

Read more

A look at how output-based aid (OBA) is being used to help the urban poor access water services

• Until recent projects funded by the municipal council and the World Bank made clean water available and affordable (Ksh3 per 20 liters), Kibera’s population relied on water collected from the Nairobi dam.  The water from the dam is not clean and made the dwellers vulnerable to contracting cholera or typhoid; and   
•  Most dwellings in Kibera do not have toilet facilities, relying instead on latrines which are just holes in the ground and each one shared by up to 50 shacks.

• In Cameroon, only about a third of the national population has access to piped water. A GPOBA pilot with a grant of over US$5 million aims to deliver new piped water connections for about 40,000 poor households. The project is the first GPOBA project to use an affermage contract, a model which transfers the operation of a national utility to a private operator while investment remains the government’s responsibility.  

• In Indonesia, two projects with grants totaling about US$ 5 million aim to help low-income communities in Jakarta and Surabaya gain access to clean water. In Jakarta, unconnected households can pay as much as 15 percent of their household income on water. Often, the water that they do have access to is overpriced by informal providers or is collected from shallow wells and contaminated. In Surabaya, the pilot project aims to extend piped water access to over 77,000 people.

• Although Morocco is a middle-income country with good access to clean and affordable water for most of the population, there are some poor communities in peri-urban settlements that faced the “last mile” paradox. So, although the water infrastructure was there, the cost of connecting to the network presented a barrier to access for poor households. In partnership with the government and the operators of water utilities in Casablanca, Meknès, and Tangiers, a GPOBA grant of US$7 million is helping over 11,000 households connect to local water networks.

• In the Philippines, the Manila Water Supply pilot will help almost 100,000 people gain access to clean, potable water. So far, 45 projects have been completed and benefited 11,000 households. As well as enjoying the benefit of 24-hour access to clean water supply, the target households have also reported financial savings and a reduction in the incidence of water-borne diseases. Encouraged by the initial success of the Manila project, the Government of the Philippines is exploring the idea of a national OBA facility to help ensure access to water for people across the country.

•  In Uganda’s capital city, Kampala, water connections for the poor will help bring access for communities in targeted urban settlements up to almost 100 percent by the project’s end.

•  In Yemen, a GPOBA grant of US$5 million will help the poor in urban and peri-urban areas gain access to safe drinking water and sanitation services. The pilot project is also being used as a model to show that tapping into private sector expertise and encouraging competition in the water sector can both serve the poor and help to reduce infrastructure costs.