Financing Small Piped Water Systems in Rural and Peri-Urban Kenya
In Kenya, community run small-scale water systems play a critical role in supplying and improving access to water services in peri-urban and rural areas. This is largely because municipally-owned water services providers currently supply only 25 pe...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2011/09/15147010/financing-small-piped-water-systems-rural-peri-urban-kenya http://hdl.handle.net/10986/17316 |
| Summary: | In Kenya, community run small-scale
water systems play a critical role in supplying and
improving access to water services in peri-urban and rural
areas. This is largely because municipally-owned water
services providers currently supply only 25 per cent of the
country's population and 39 per cent of the population
within their service areas. Historically, under a
centralized institutional structure, a large number of
communities were tasked with managing and recovering the
operating costs of small piped water supply systems
installed by government. The importance of these community
providers has been recognized in recent reforms of the
sector. These provide for a legal and regulatory framework
for community based organizations to engage in water service
provision outside major towns and cities. However, a host of
problems complicate efforts to support these community
organizations to become reliable service providers,
including their limited management capacity, low operating
revenues and lack of access to finance. Efforts to license
and regulate the operations of community water projects have
been hampered by the slow implementation of policies aimed
at decentralizing water service delivery to communities in
areas not covered by municipal water services providers. In
spite of considerable liquidity within the Kenyan financial
sector, domestic banks do not typically finance investments
in water infrastructure because of the long term nature of
infrastructure finance and the perceived lack of
creditworthiness of rural and peri-urban small scale water
providers. Efforts to license and regulate the operations of
community water projects (CWPs) have been hampered by the
slow implementation of policies aimed at decentralizing
water service delivery to communities in areas not covered
by municipal water services providers. With the considerable
public financial resources available in the water sector,
the size of the market for a loan linked product is likely
to be limited over the medium term. However, public funds
are not sufficient to build the infrastructure required to
effectively meet the demand for water services: hence the
increasing focus on cost recovery tariffs and the
considerable initiatives underway to access supplementary
financial resources from the private sector. |
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