Who is KPWF?
Kenya Pooled Water Fund (KPWF) is a non-profit company established to provide water utilities known as Water Service Providers (WSPs) with access to capital market financing for their water and sanitation infrastructure needs. The financing will be in the form of long term Kenya Shilling loans.
KPWF is implementing this as an annual program whereby a bond will be issued to domestic pension funds and other institutional investors; and the bond proceeds on-lent to WSPs. The loans will be paid back by the WSPs as the investors receive their return on investment.
Pooling of loans lowers risk exposure to the bondholders. A reserve account and guarantees will serve as credit enhancements thus making the bonds more secure.
A key benefit of KPWF bond financing is that longer-term financing lowers the annual cost of financing (by comparison with short-term commercial bank lending), allowing for lower tariff increases to service debt.
KPWF creates an opportunity for government of Kenya, Development Partners and International Finance Institutions to achieve multiple leverage of their sectors financial contributions (grants, concessional loans, guarantees, etc.)
The Constitution in Kenya and Vision 2030 aim to achieve universal access to safe water and sanitation for all by 2030 to meet Sustainable Development Goal 6 (SDG 6). As at 2017, water coverage stood at 55% in areas covered by Water Service Providers in Kenya. Sewerage stood at 16% (WASREB Impact Report 10, 2018).
The required investment to achieve 100% coverage in the water and sewerage sector by 2030 is KES 1,765 Billion, with a financing gap is KES 1,172 Billion which is equivalent to KES 100 Billion annually (WASREB Lender’s Manual for Commercial Financing of the Water and Sanitation Sector of Kenya Report, 2015).
KPWF seeks to assist Kenya’s water sector partially close that gap through financing WSPs’ infrastructure to increase water access, improve sewerage coverage and reduce water losses.
The Operational Team
Cardano Development is committed to helping frontier economies develop and prosper, by introducing innovative financial risk management products and services to make people and businesses active in the local real economy more resilient and protected against risk.
Netherlands Water Partnership
The Netherlands Water Partnership is a network of more than 200 parties consisting of Government, Industry, Knowledge Institutions and NGOs of the Dutch Water Sector seeking to address international water issues.
Kenya Innovative Finance Facility for Water (KIFFWA)
The Kenya Innovative Finance Facility for Water(KIFFWA) is a co-developer of water initiatives in Kenya. It provides early-stage capital, finance, and engineering expertise to support the creation of viable water investment opportunities and attract (private) providers of finance.