International Financial Corporation and Safe Water Network undertook this assessment to identify options for attracting greater commercial investment in the water sector, in Kenya and elsewhere. This includes an examination of the policy environment and of the populations' ability to pay for water at prices necessary to fund private investment, as well as a review of existing models to determine which are scalable in this context.
- Challenges to commercial water provision in Kenya include low ability and willingness to pay, highly seasonal demand, and erratic source water supplies.
- The Delegated Management Model has the potential to accelerate urban coverage by taking advantage of fast growing, high-density populations who are accustomed to paying for water, and bulk supply and electric connections.
- Decentralized kiosk models and rehabilitation of community systems are appropriate for rural markets.
- Kenya has well developed local financial markets, with commercial investment in infrastructure common, but investment in the water sector is lagging. K-Reo Bank's "Maji ni Maisha" program is a step to bring commercial finance to water using output-based aid.
- Recommendations to improve the enabling environment are: extend cross-subsidies beyond existing WSP networks; establish the case for safe water, with improved oversight; and provide better incentives to formalize the sector, including streamlining the permitting process.
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- Copyright 2013 International Financial Corporation (World Bank Group), Safe Water Network.
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