In brief

The Kenyan government created the Water Services Trust Fund (WSTF) in 2004 as a state corporation established under the Water Act, 2002. Its mandatewas to help finance the delivery of water and sewerage services to areas of Kenya without adequate supply. The WSTF mobilises resources and provides funding, and the programme achieved positive results from the beginning, reaching urban and rural communities alike and developing the country's water infrastructure.

The challenge

Rapid urbanisation in African cities has not been matched by the construction of the appropriate infrastructure to support the population, meaning that many people in these areas live in informal settlements which lack basic services. “By 2020 it is estimated that more than half of the people of Africa will reside in urban areas, increasing the present urban population from 300 million to 700 million. The high rates of urbanisation, coupled with low rates of economic growth, suggest that this population growth will predominantly occur in the sprawling and underserved informal settlements – where about two-thirds of the people in African cities currently live, most without access to basic water supply, sanitation and electricity services."[1]

This was the case in Kenya at the turn of the century, when cities across the country hadlarge and rapidly growing informal settlements, with insufficient utilities to support them. The arrangements for water supply had been weak, resulting in declining investment, a deteriorating level of service, and diminishing financial returns. “Water supply provision in Kenya is characterised by low coverage, unreliable service, poor financial management, and neglected operation and maintenance. This has translated into generally inadequate services which are particularly lacking for the urban poor."[2]

Therefore, there has long been a need in Kenya to expand access to water supplies more evenly and efficiently to all low-income areas .

The initiative

The WSTF is a state corporation, which was established in Kenya in 2004 under the Water Act, 2002 with the mandate of assisting "in financing the provision of water services to areas of Kenya which are without adequate water services".[3] Its guiding principles were set out in the Trust Deed of 26 April 2004, and the WSTF became fully operational in 2005.

As a water reform institution, it mobilises resources and provides financial assistance towards the capital investment costs of delivering water services and sanitation. The WSTF operates as a "basket-funding mechanism", encouraging investment by utilities in "last-mile infrastructure". It deploys low-cost technologies, including water kiosks, yard taps, and sanitation facilities.[4]

The public impact

The programme achieved positive results from its early stages, reaching urban communities and developing infrastructure in water and sanitation. An independent evaluation conducted in 2011 also found positive impact from the WSTF's rural programmes, including:

  • "Reduced distance and time taken to fetch water
  • "Increased participation of women in community development
  • "More children, particularly girls, completing primary education
  • "Increased income and employment opportunities within communities
  • "Improved leadership and management skills within communities
  • "Significant reduction in the prevalence of water-borne diseases
  • "Reduction in water-related conflicts
  • "Enhanced partnerships among relevant institutions."[5]

As of June 2015, WSTF had earmarked over KES7 million for water resource, supply and sanitation services to underserved areas in Kenya. It completed 300 rural water supply and sanitation projects reaching 2 million people, 312 water resource management projects reaching around 600,000 people, and 191 urban water supply and sanitation projects reaching almost 1.5 million people, among other initiatives.[6]

The fund proved to be a successful mechanism to reach underserved communities. “The WSTF, and more specifically its urban financing window, has been instrumental in reaching out to the allegedly difficult-to-serve urban poor: nearly 1.8 million people have gained first-time access to safe and affordable water services through water kiosks and yard taps since 2008. Scaling up sanitation is accelerating, with about 120,000 people served over the last five years and that number set to rise to 429,000 by the end of 2016."[7]

The benefits to communities where WSTF has been implemented include:

  • "Access to water of greater quality and quantity
  • "Less time spent fetching water and therefore more time for improved health and hygiene
  • "Improved environment through rehabilitated water
  • "Reduced water-related conflicts
  • "Improved livelihoods due to access to water for economic [activities]...
  • "A culture of cooperation through stakeholder collaboration."[8]
Have an idea for a case study? Print

What did and didn't work

All cases in our Public Impact Observatory have been evaluated for performance against the elements of our Public Impact Fundamentals.

Legitimacy

Stakeholder Engagement Strong

The WSTF has had strong support from stakeholders at all levels, including international partners, the Kenyan private sector, and local communities. The main government participant is Kenya's Ministry of Water and Irrigation (MoWI).

The programme has benefited from extensive international support since its inception. For example, collaboration with Finland from the 1980s helped lay the foundations for work in the water sector before the creation of the WSTF in 2004, and the Finnish government contributed to the funding of the WSTF. "To improve the management and use of water resources in Kenya, the Ministry for Foreign Affairs of Finland supported the WSTF with approximately 4.5 million euros during the four-year period from 2009 until 2013, through an approach called 'Harmonised Support to Rural Window of WSTF'."[9]

Finland and other partner countries, such as Sweden and Denmark, have participated in the implementation of similar initiatives, enabling the programme to evolve and improve over time. In 2003, the Royal Danish Embassy — with support from the MoWI —contracted with a Nairobi-based consulting company, ASAL Consultants, to implement two pilot projects as a private water service provider (WSP) for the Rural Water Supply and Sanitation (RWSS) programme. Local communities were involved in these projects, which include capacity-building, using local labour, as well as assessing the attitude of local people towards the initiative.[10] Thus, through such initial pilots there was significant involvement both from the private sector, which provides technical expertise, and from local communities.

Political Commitment Strong

The Government of Kenya (GoK) has supported the WSTF through policy, systems, and financial and other resources.

The launch of the WSTF was supported by drawing up the Trust Deed setting out its guidelines (see The Initiative above), and the appointment of a first board of trustees by the then minister for water and irrigation. “The Trust’s mandate, which is found in section 83 of the Water Act 2002, is the provision of financial services towards the improvement of water services to areas of Kenya that are underserved, giving priority to poor and disadvantaged communities… The GoK has, over the years, supported the WSTF through budget allocations for both recurrent and development expenditure. Development budget often includes counterpart funds for financing agreements with development partners.”[11]

Public Confidence Strong

Pilots for the water kiosks showed that such shared facilities were accepted and welcomed by consumers. “After scaling up, nearly 1.8 million people have gained first-time access to safe and affordable water services, and up to 429,000 people are scheduled to receive sanitation services by the end of 2016."[12]

The local presence of monitors has allowed the programme to expand and integrate cities across the country. "The capacity-building by the WSTF and its county resident monitors (CRMs)... has enabled the WSP [Nakuru Water and Sanitation Services
(NAWASSCO) and Mavoko Water Company] to build a very good rapport with the community members and customers. The reluctance and barriers in customers and community reporting pipe-bursts and leakages are gone; the WSP has a toll-free line through which the customers reach the WSP and report any complaints."[13]

Policy

Clear Objectives Good

The initial objectives of the programme were clear, but they were broad and difficult to measure. They were later clarified to make the targets more detailed.

The WSTF was formed with the following objectives:

  • “Providing finance and other support towards:
    • “The capital investment costs of providing water services to communities without adequate water services
    • “Activities in the area of water services based on the priorities of the GoK as outlined in the water services strategic plan developed under the Water Act, 2002
    • “Capacity-building activities and initiatives which enable communities to plan, implement, manage, operate and sustain water services
    • “The creation of awareness and dissemination of information regarding community management of water services
    • “Active community participation in the implementation and management of water services
  • “Providing a mechanism for managing funding systems whose objective is to fund activities within the water sector generally as may from time to time be assigned to it to manage."[14]

Over time, the WSTF’s strategic objectives were redefined and made more specific. For the period 2014 to 2017, they include:

  • “To mobilise KES9.96 billion to finance investment programmes in the counties by June 2017
  • “To finance the development of sustainable water and sanitation services and water resources management to improve access for 2.95 million people in underserved areas
  • “To develop innovative funding mechanisms to enhance development of sustainable water, sanitation and water resources projects in the counties
  • “To enhance capacity development for efficient service delivery and ensure sustainability of the investments."[15]

Evidence Strong

There were two pilot projects to test the principles of the WSTF before it was launched, enabling the identification of best practices as well as areas for improvement in the implementation of the programme.

They ran from December 2003 to August 2004. They were the Kalambani-Mutha Water Project in Kitui, which has a population of 15,000 people, and the Mlilonyi Water Project in Taita-Taveta, which has a population of about 5,000 people. Their joint purpose was to:

  • “Gain practical experience by constructing the two pilot projects together with their communities while also training them in operation and maintenance
  • “Fill the gap in construction of water projects while the Ministry [the MOWI] was shifting to the new policy of the Water Act, 2002.”[16]

From these, it was possible to learn methods to cut costs and maximise the use of resources. “The methodology of buying local labour and materials for about 50 percent below market cost from the communities reduced the construction cost. Another big advantage was allowing communities to earn cash instead of the project demanding 10 percent cost-sharing from them. The difference between people paying and receiving cash in poor rural communities is enormous in terms of improved livelihood and development."[17]

The government was also able to draw on earlier collaborations with international donors. Its initial collaboration with the Finnish government through the Western Kenya Water Supply Programme resulted in considerable improvement in people’s access to improved water supply and the capacity of local institutions and communities to provide water services. It also provided input into the creation of the WSTF (see also Stakeholder Engagement).

Feasibility Good

Despite the economic conditions of the country and certain risks inherent in the policy, the WSTF programme has been implemented with a careful methodology and can count on support from local communities for the work of the government and external parties such as international donors.

Some intrinsic risks exist in the nature of the Kenyan policy environment and in the provisional processes associated with the country’s engagement in the water sector. “The Water Bill 2004 is still pending enactment by government and yet it is the one that provides for transitional modalities in the water sector.”[18]

Considering funding as a constraint on the long-term feasibility of the project, it has developed the following methods of financing and operations:

  • “Rural Investments: Support towards implementation of water supply and sanitation projects for underserved rural communities. The programme is implemented through water utilities serving rural areas
  • “Urban Investments: Support towards water supply and sanitation projects for low income urban areas. This programme is implemented through the WSPs
  • “Water Resources Investments: Support to communities to effectively manage and conserve their water resources within their sub-catchments. The programme is implemented through the Water Resources Users Associations (WRUAs)
  • “Results-Based Financing: Support towards water and sanitation projects in urban low-income areas, financed through loans from Kenyan commercial banks which are then subsidised by the WSTF on achievement of agreed outcomes. The programme is financed through the WSPs.”[19]

For its latest round, the budget for the programme has been evaluated in advance and allocated to targets with sensible timelines, with the contribution of funding from several supporting nations as well as the Kenyan government. "Sweden and Finland funding under the programme is KES1.6 billion (EUR13.5 million) and includes a TA component of EUR3.0 million. The GoK is expected to contribute approximately KES405 million (EUR3.3 million) which is 25 percent of total Sweden and Finland funds as counterpart funds to the programme. This will raise the programme budget to a total of EUR16.875 million (approximately KES2 billion)... The ability of WSTF to absorb financial resources since 2004 is a reflection of its capacity to deliver on its mandate as well as increasing credibility amongst development partners and the GoK."[20]

Action

Management Fair

The management of the WSTF programme is well structured and appears to operate effectively. However, there are still certain weaknesses in the government's ability to manage the programme across the country.

The Water Act, 2002 established certain provisions for the management of the water sector in Kenya. Most significantly, it established autonomous regulation in the sector through the Water Resource Management Authority (WRMA) and the Water Services Regulatory Board (WASREB), as well as a decentralisation of services to the regional level through WSPs, Water Services Boards (WSBs), Catchment Area Advisory Committees, and WRUAs.

In line with this, the WSTF maintains a layered structure of management, operating through different administrations and community organisations. The programme works with various stakeholders inside and outside the sector in the implementation of its programmes, as follows:

  • “County governments as key stakeholders under devolved structures
  • “The WRMA, which assists WRUAs in developing sub-catchment management plans and provides oversight for water resources management
  • “WSBs, which in the past have been overseeing the community organisations in rural programmes, and WSPs in the urban programmes
  • “WSPs, which implement and provide water and sanitation services in urban and now also rural areas where relevant
  • “Community groups (WRUAs and CBOs), which participate in the implementation of their own projects in rural areas
  • “Other government and private sector institutions, e.g. in health, education and NGOs."[21]

An audit conducted in 2014-2015, however, found a number of areas for improvement in the strategic management of the programme, after which it was decided to implement several adjustments. “The WSTF is in the process of developing its strategic plan and an associated results-based management (RBM) framework. This is a positive step towards strengthening the organisation’s development strategy. An area that needs further development is the institutionalisation of RBM, with a focus on reporting of results, and a project management system for the entire organisation.”[22]

Measurement Good

Monitoring mechanisms have been in place to track the WSTF's performance. It is also audited annually by international firms, which have identified some areas for improvement in the existing methodology.

The monitoring and evaluation of the Kenyan water sector has been good, using several indicators and reports to track its performance. These indicators include: 16 key service indicators; 11 minimum service level indicators; 19 performance indicators; and over 60 WASREB indicators. Similarly, the reporting includes:

  • Quarterly/annual performance, accounting and licence reports provided by water sector institutions to the MoWI and WASREB
  • Project evaluations and sector performance reports provided to donors
  • Quarterly/annual public expenditure reviews for sector ministries.[23]

On the other hand, an audit carried out in 2014-2015 found certain weaknesses in the existing system and recommended improvements in the monitoring of the programme. "The current model of monitoring implementation of projects funded by the WSTF through use of the WSBs and WRMAs has not been very successful due to the delays experienced in their quarterly reporting. In addition, the quality of some of the reports submitted has not been adequate to describe the activities implemented. To address this issue, the systems audit recommended that the WSTF takes a more active role in the monitoring of project implementation. Apart from frequent monitoring visits, the Fund should develop standard reporting templates which capture the programmatic (milestones) and financial (expenditure) aspects of investments."[24]

Alignment Strong

There has been sound alignment between the GoK, the international organisations and partner countries, and the local communities where the programme has been implemented.

The WSTF has maintained close collaboration with international organisations from the beginning of the programme, and they have supported the programme by providing both finance and advice. "The WSTF collaborates with several partners to develop the water sector within urban areas. These partners include:

  • “The German Development Bank (KfW), providing EUR12 million (KES1.3 billion) from 2012 to 2015
  • “The European Union, providing EUR10.225 million (KES1.16 billion) from 2008 to 2014
  • “The Bill and Melinda Gates Foundation, providing USD 7.13 million (KES600 million) from 2011 to 2016."[25]

Countries like Finland, Sweden and Denmark have also worked closely with the Kenyan government on this initiative. "The development policies of the Government of Finland and the Government of Sweden are compatible with the GoK’s drive to ensure that all Kenyans have access to clean, safe and adequate water as enshrined in the Constitution of Kenya, 2010... Together with Denmark, Sweden supported the Kenya Water and Sanitation Programme from 2004 to 2009. Sweden’s support to [the programme] comprised three components: RWSS undertaken through the WSTF and WSBs; water resources management undertaken through the WRMA; and water sector reforms undertaken through the MoWI."[26]

Similarly, in order to have a good reach into local communities, the Fund uses local monitors to engage with counties. “The WSTF has engaged CRMs with the objective of enhancing efficiency and effectiveness in the project implementation cycle, and sustainability of the investments. The CRMs contracted by the WSTF work closely together with the county governments and the implementing partners with the following key roles (among others):

  • “Assisting the county/implementing partners with data collection (e.g. water point mapping using the method and tools approved by WASREB and the WSTF)
  • “The identification of priority [water supply and sanitation] interventions (rural, urban and catchment protection)
  • “Acting as the liaison persons between the county, the implementing partners and the WSTF
  • “Monitoring and providing support to the WSTF-funded projects
  • “Identifying, together with the local stakeholders, capacity gaps and ensuring that the required expertise is made available by the WSTF for support."[27]

Sign up to stay updated on news about our meetings, our insights and our other activities.
Back to top