Africa’s First Water Fund Launched in Kenya

On March 20, the Kenya government along with businesses, conservation groups, and utilities launched Africa’s first water fund. The Upper Tana-Nairobi Water Fund is designed to provide a sustained water supply to more than 9.3 million people and to generate US$21.5 million in long-term benefits for Kenyan businesses and citizens, including farmers. This landmark initiative will cut costs for hydropower and clean water while addressing water flow and soil erosion issues in the Upper Tana River basin. The fund will expand on a successful, global Water Fund model ― bringing public-private partnerships and innovative financing for watershed conservation into Africa.

The focal point of the new fund is the upper reaches of Kenya’s majestic but troubled Tana River. Soil erosion and low water supplies affect businesses, farmers, and communities, increasing costs and limiting access to this essential resource. The Tana provides 95% of Nairobi’s water and half of Kenya’s hydropower-generated electricity. The Tana also is vital to Kenya’s food security, as it supplies water to a million farms in one of Kenya’s most productive and economically important regions.

The Water Fund will be a revolving fund and a public-private partnership endowment to support land-conservation measures upstream. Key strategies include reducing sedimentation, improving dry-season water flows, increasing the efficiency of water used in agriculture, reforestation, and other economic and social benefits for communities, farmers, and businesses.

Water demand has grown tremendously over past years, and at least 30% more water is needed. According to the Nairobi Water Fund’s business case, investing at least $10 million in on-the-ground environmental management for the Upper Tana River over a decade will reduce sediment concentrations in rivers by more than 50%. The investment also will decrease annual sedimentation in the Masinga hydropower reservoir by 18%, and it will increase annual water yields across priority watersheds by 4%, with yields increasing to 15% during the dry season in some locations.

The business case also shows that over a 30-year period the improvements will provide $2 in benefits for every $1 invested. Financial supporters have already funded a 2-year pilot phase, which is enabling 5,000 farmers to adopt conservation measures. These projects have provided critical lessons for the fund as it moves toward full implementation.

The Nairobi Water Fund is spearheaded by a private-public steering committee comprising The Nature Conservancy, Nairobi City Water and Sewerage Company, Kenya Electricity Generating Company, International Center for Tropical Agriculture, Tana and Athi Rivers Development Authority, Water Resources Management Agency, as well as the water technology company Pentair, East Africa Breweries, Coca-Cola, and Frigoken Horticulture. Read more.

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