> You can download the WSTF Brief in PDF format here

 

I. INTRODUCTION

Water Services Trust Fund (WSTF) is a State Corporation established under the Water Act (2002) with the mandate "to assist in financing the provision of water services to areas of Kenya which are without adequate water services."

The organisation is guided by the Trust Deed of 26th April, 2004 and nested on rapid, proactive and innovative measures stipulated in its core values of accountability, transparency, good governance, teamwork, equity, fairness, honesty, integrity, customer focus, and work-life balance. We are one of the water reform institutions, and act as a basket fund for mobilising resources and providing financial assistance towards capital investment costs of providing water service and sanitation.

WSTF is mandated to finance water and sanitation services for the poor and underserved communities in rural and urban areas. In the Water Act (2016), The Mandate / Object of the Fund is to provide conditional and unconditional grants to the Counties and to assist in financing the development of and management of water services in the marginalised and underserved areas including:

  • Community level initiatives for the sustainable management of water resources
  • Development of water services in rural areas considered not to be commercially
  • Development of water services in the under-served poor urban areas

 

Vision

To be the institution of choice in financing the improvement of access to water and sanitation for the underserved in Kenya

 

Mission

To finance the development of sustainable water and sanitation services and water resources  management

 

Strategic Objectives

WSTF's strategic objectives have been defined for the period 2014 to 2017 and they are:

  1. To mobilise KES 9.96 billion to finance investment programmes in the counties by June 2017,
  2. 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,
  3. To develop innovative funding mechanisms to enhance development of sustainable water, sanitation and water resources projects in the counties,
  4. To enhance capacity development for efficient service delivery and ensure sustainability of the investments.

 

Core Values

  • Sustainability
  • Integrity  
  • Good Governance
  • Human Dignity
  • Teamwork

 

Achievements

The Water Services Trust Fund has so far received KES 11 billion for water resource, supply and sanitation services to the underserved areas in Kenya. The table below shows projects funded and population reached through the programmes by June 2015:

Funding window

Funded Projects

Disbursed Millions Kshs Population Coverage
Rural Water Supply & Sanitation 300 2,500 2,000,000
Water Resources Management 312 350 600,000
Urban Water Supply & Sanitation 191 2,800 1,400,000
Results-Based Financing 38 29 90,000
WASH (UNICEF) 1360 1,358 982,700
Total 2,201 7,037 5,072,700

 

 

The success of WSTF can be attributed to the following factors:

1. Developed and documented systems: The Fund has developed three main mechanisms of financing and operations as follows:

  1. 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.
  2. Urban Investments: Support towards water supply and sanitation projects for low income urban areas. This programme is implemented through the Water Services Providers (WSPs).
  3. 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.
  4. Results-Based Financing: Support towards water and sanitation projects in urban low income areas, financed through loans from Kenyan commercial banks which are then subsidized by WSTF on achievement of agreed outcomes. The programme is financed through the Water Services Providers (WSPs).

2. Accountability and transparency: WSTF handles its activities and the resources entrusted to it with integrity, and in a transparent, accountable manner. The Fund’s activities are audited annually by independent and internationally reputed firms such as Deloitte and Price Water House Coopers. This ensures that resources are used as they ought to be, and audit queries are keenly followed up.

The process of applying for Funds from WSTF, and the manner in which funds are disbursed to and utilized by implementing agents, is clearly  documented.

WSTF holds two Steering Committee meetings each quarter, one each for Urban and Rural Programmes. In these meetings the quarterly and annual progress of Programmes / projects is discussed and issues dealt with. This continuous feedback and reporting to Development Partners plays a big role in accountability.

 

II. GOVERNMENT OF KENYA (GOK) AND DEVELOPMENT PARTNERS SUPPORT TO WSTF

GOK has supported WSTF through policy, systems, and financial and other resources.

WSTF was established in 2004 with the drawing up of the Trust Deed and the appointment of the first Board of Trustees by the then Minister for Water & Irrigation. The Fund became fully operational in March 2005. The Trust’s mandate which is found in section 83 of the Water Act, 2002, is provision of financial services towards the improvement of water services to areas of Kenya that are underserved, giving priority to poor and disadvantaged communities. WSTF was formed as part of the water sector reforms in Kenya.

GOK has over the years supported WSTF through budget allocations for both recurrent and development expenditure. Development budget often includes counterpart funds for financing agreements with Development Partners.

The GOK facilitates the signing of financing agreements for pro-poor programmes out of which WSTF signs memorandums of understanding (MOUs) with Development Partners.

 

III. DEVELOPMENT PARTNERS OF WSTF

The Development Partners of WSTF focus on either rural or urban programmes as follows:

 

Urban Programme

1. German Development Cooperation (KfW & GIZ)

  • KfW (German Development Cooperation) - The support is for provision of water supply and basic sanitation for the Urban low income areas across the country. KfW Phases I & II.  Agreements have already been implemented. Phase III Programme is being implemented in 40 Counties..
  • GIZ is the technical arm of Germany’s support and assists WSTF in technical issues and Technical Advisors are stationed at the WSTF.
  • Results-Based Financing: KfW funds include a component for subsidizing commercial loans obtained by viable Water Service Providers (WSPs) from Kenyan commercial  banks to improve service delivery.   The subsidy is up to 40% of the total investment.

2. European Union – The EU support to Urban Programmes ended in June 2014. EU is now funding Rural water and sanitation Programmes through Danida MTAP II. A new EU rural programme is expected to be signed in 2017 for eight (8) ASAL counties to be confirmed.

3. Bill and Melinda Gates Foundation (BMGF) – The Programme supports Upscaling of Basic Sanitation for the Urban Poor (UBSUP) through subsidized provision of plot and household sanitation. BMGF Programme is implemented in partnership with the KfW support.

 

Rural Programme

1. Sweden – Sweden has supported WSTF from inception. The first Programme, Kenya Water and Sanitation Programme (KWSP) has already been completed. The second Programme was the Bridging Phase and ended in June 2014. The support is for water supply, sanitation and water resources management. The current programme is being implemented jointly with Finland in 6 target Counties for water services and water resources management (Tharaka Nithi, Kwale, Migori, Nandi, Laikipia, Narok).

2. Finland – The first Programme ended in June 2013.  The current programme is being implemented jointly with Sweden in 6 target Counties for water services and water resources management. Finland is providing technical expertise to WSTF through Orgut.

3. Denmark through DANIDA – The Programme is implemented in six (6) counties through the Directorate of Arid and Semi-Arid Lands, Ministry of Devolution and Planning, and the first phase ended in Dec 2014 (Garissa, Wajir, Marsabit, Tana River, Lamu, Isiolo). DANIDA was also part of the completed KWSP Programme alongside SIDA. The current MTAP II Programme is ongoing and is funded jointly by Danida and EU. The new Green Growth and Employment Creation Programme has been signed and will commence in 2016/2017 financial year for Ksh. 900 million. Target Counties are eight (8) including the six (6) MTAP counties plus Mandera and Turkana. Danida is providing technical expertise to WSTF.

4. IFAD – This is a Programme under International Fund for Agricultural Development (IFAD). The Upper Tana Natural Resources Management Project (UTaNRMP) is targeting six (6) counties in the Upper Tana region (Embu, Muranga, Kirinyaga, Nyeri, Tharaka Nithi, Meru). Under the Programme WSTF is the Funding Instrument for grants to communities (Water Resource Users Associations and Community Forest Organizations) for Sustainable Resource Management activities.

5. World Bank – The Programme (Output Based Aid) works through providing subsidy for loans obtained by Water Services Providers (WSPs) from Kenyan commercial banks with the aim of increasing water and sewerage connections to urban low income areas. WSTF is the funding instrument for the subsidies which are capped at 60% of the total investment to the poor.

 

Programmes implemented and completed in the past:

  1. UNICEF WASH – The Programme ended in Dec 2015. It implemented Community Water and WASH activities in 20 target ASAL and flood prone districts.
  2. World Bank Output Based Aid for Rural projects which was done in collaboration with K-Rep Bank.
  3. UN Habitat funding towards the mapping exercise for urban low income areas in Kenya resulting in the Maji Data and the website www.majidata.go.ke

 

Summary of WSTF's development partners' current support to WSTF

SUMMARY OF WSTF DEVELOPMENT PARTNERS’ CURRENT SUPPORT TO WSTF 

Financing Partner Agreement Amount (KES vary with exchange rates) Period of Agreement Purpose of Support Current Status
1 Government of Kenya KES 1.5 billion WSTF’S operational and development activities Ongoing – Annual Budgetary Allocation
2  Sweden  KES 750 million  2014 – 2018  Sweden and Finland Joined Programme Support:

- Water supply and sanitation in Rural underserved areas through the Water sector institutions at the County (Water Services Providers etc)

- Water resource management through Water Resources Users Association (WRUA). Target 6 Counties per selection criteria: Laikipia, Migori, Tharaka Nithi, Kwale, Narok, Nandi

 The new joint programme Finland Agreement was signed in Oct 2014 and Sweden Agreement was signed in Dec 2014

Programme implementation ongoing

3  Finland  KES 900 million  2014 – 2018
4  Denmark (Danida MTAP 1& 2)

KES 250 million

 2010-2014 (MTAP 1) 2014 – 2016 (MTAP 2) with renewal possibility  Support to Medium-Term ASAL Programme (MTAP): First Programme (MTAP I) by WSTF through the Directorate of Arid and Semi-Arid Lands, Ministry of Devolution and Planning.

- Current Programme (MTAP II) by WSTF through Ministry of Water and Irrigation and includes Water Resources Management and Community Water supply and Sanitation projects in 6 ASAL counties: Tana River, Lamu, Garissa, Marsabit, Isiolo, Wajir. The programme

MTAP 1 closed in Dec 2014: MTAP II is ongoing.
5  KfW Phase II & III (Germany)  KES 1.5billion  2011 - 2014 (Phase II, 2014 – 2017 Phase III)  - Support Provision of water supply and sanitation for the Urban low income areas through Urban Project Cycle (UPC)

- KfW has a component of Aid on Delivery (AOD) to provide 40% subsidy to Water Service Providers for commercial loans aimed at improving service delivery

 -Continuing with Phase III & Aid on Delivery implementation. 

- New Phase III Agreement was signed in Dec 2014.

6  EU SHARE (Rural)  KES 600 million  2014 - 2019  Support to Rural Window in ASAL (upscaling MTAP) water and sanitation projects. The programme is joint with Danida MTAP II  MTAP II ongoing
7  Bill and Melinda Gates Foundation (BMGF)  KES 700 million  2011 - 2017  Supports Up-scaling of Basic Sanitation for the Urban Poor (UBSUP) through subsidized provision of plot and household sanitation. Implementation ongoing across the Country
8  IFAD  KES 600 million  2014 - 2020  This is a new Programme under International Fund for Agricultural Development (IFAD) called UTaNRMP targeting sustainable resource management in the Upper Tana region. Under the Programme WSTF is the Funding Instrument for grants to Water Resources Users Associations (WRUAs) and Community Forest Associations (CFAs) for natural resources management.  The MOU with WSTF was signed in April 2014 and implementation is ongoing
9 World Bank   KES 1 billion  2014 – 2018  Output Based Aid (OBA) will be providing 60% subsidy for commercial loans to Water Service Providers who in turn will increase connections to low income areas. The Programme targets Kenyan towns and cities except Nairobi  The Grant Agreement between GOK and the World Bank was signed in September 2014 and the Subsidiary Agreement was signed in Nov 2014. Implementation is ongoing.
10

 - Kenya Markets Trust

- Water and Sanitation for the Urban Poor

- SNV

Technical Support and funding assistance to WSTF on areas of Strategy Development and review, Communication, innovation, climate change, Service Delivery models among others.

 

IV. STAKEHOLDERS OF WSTF

WSTF works with other stakeholders in the sector and beyond in implementation of its programmes as follows:

  1. County Governments as key stakeholders under devolved structures
  2. Water Resources Management Authority who assists WRUAs in developing sub-catchment management plans (SCMPs) and provides oversight for water resources management
  3. Water Services Boards who in the past have been overseeing the community organizations in Rural Programmes, and Water Services Providers in the Urban Programmes
  4. Water Services Providers who implement and provide water and sanitation services in urban and now also rural areas where relevant
  5. Community groups (WRUAs and CBOs) who participate in implementation of their own projects in rural areas.
  6. Other government and private sector institutions e.g in health, education, NGOs etc.

 

V. IMPACT OF WSTF SUPPORT

WSTF support has resulted in many positive aspects to communities served and implementing agents as follows:

  • Access to water of quality and quantity
  • Less time spent fetching water therefore more time for
  • Improved health and hygiene
  • Improved environment through rehabilitated water
  • Reduced water related conflicts
  • Development of leadership and governance skills in
  • Improved livelihoods due to access to water for economic
  • Increased Programme Management skills for water utilities
  • Increased revenue collection for WSPs
  • A culture of cooperation through stakeholder collaboration

 

> You can download the WSTF Brief in PDF format here

Home   |   Partnerships   |   News and Events   |   Contact Us   |   Report Corruption