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What is the Urban Investments?

The Urban Investments through its Urban Projects Concept (UPC) was established in 2007 to respond to the specific water and sanitation challenges of urban low-income settlements in Kenya. There are approximately 2,000 low-income areas in the country with an estimated total population of close to eight million. These low-income areas, which are a mixture of unplanned informal settlements and planned low-income residential areas, have inadequate water supply and sanitation.

The portfolio of the urban investments has grown over time and today it comprises of two components:

1. Urban Projects Concept (UPC) was developed in 2007 to respond to the water and public sanitation challenges of urban low-income areas
2. Upscaling Basic Sanitation for the Urban Poor (UBSUP) was initiated in 2011 to respond to household/ plot level sanitation challenges

The Urban Investments’ objective is to provide technical and financial support for water and sanitation projects in low-income urban areas. In addition, it focuses on:

• Improving public health,
• Contributing to the improvement of urban livelihoods,
• Reducing unaccounted-for water,
• Building capacity at water utility level,
• Ensuring that low-income areas are perceived as a business opportunity.

Target clients of the Urban Investments

The Urban Investment Programme primarily targets the urban poor living in both planned and unplanned low-income areas. The projects are implemented through registered water utilities, the WSPs, throughout the country. Besides implementation, the WSPs are responsible for the management of project funds as well as for the successful and sustainable operation of the project.

How the Urban Investment Programme works

The Urban Investment Programme is enabling the WSPs to extend their formalised services to the unserved and underserved urban poor living in low-income areas by financing projects that incorporate simple, cost-effective and sustainable technologies. The Water Fund provides various forms of support to water utilities, urban communities and other stakeholders including:

• Funding for project proposals that address the urban poor with improved water supply and sanitation services,
• Data on almost all urban low-income areas in the database MajiData, which facilitates the preparation of project proposals by the water utilities,
• Online toolkits that assist the water utilities, the communities involved and other stakeholders to plan, implement and operate water supply and sanitation schemes in low-income areas,
• Technical standards, drawings and bills of quantities,
• Regular workshops for water utilities enabling the members of staff of the providers to share experiences and learn from challenges faced and best practices,
• Visualisation (online) of all implemented projects with a focus on project operation.

The financing of the projects in the Urban Investments programmes, including both UPC and UBSUP, with funds from different development partners, is done through Calls for Proposals (CfP). With every launch of a Call for Proposals, the urban water utilities are invited to prepare and submit proposals for the improvement of water supply and sanitation in the low-income areas within their service area. WSTF then does the appraisal and the awarding of project proposals. The CfP approach encourages competition and an efficient allocation of funds.

The figure below shows the various support tools, measures and activities WSTF provides during the various phases of a Call for Proposals project cycle.

The current set of technologies being implemented range from water kiosks and yard taps to water meters (pre-paid and post-paid), network extensions and public sanitation facilities. The Urban Programme is continuously working on extending the technical options. UBSUP has developed a set of household/plot level sanitation options and onsite wastewater treatment facilities.

Development partners

Since 2008, the Urban Investment has been financed by the European Union together with the German Development Bank (KfW). The German Gesellschaft für Internationale Zusammenarbeit (GIZ) started its cooperation with WSTF through the Water Sector Reform Programme in 2007. Their main role at WSTF is the provision of technical support for the Urban Investments, including UBSUP.

In July 2011, the Bill & Melinda Gates Foundation (BMGF) partnered with the WSTF, KfW and GIZ to roll out the five-year urban sanitation programme UBSUP that aims to provide sustainable sanitation services to an additional 400,000 people in Kenya’s urban low-income areas. The Investment specifically targets the populations in the “sanitation hotspots” — the informal and formal, unplanned and planned, low-income urban settlements where child mortality is twice the national average.

In 2013, KfW supported the Water Fund to implement Aid on Delivery (AOD) which provides a 50% subsidy for commercial loans to WSPs for water and sanitation projects. The World Bank has partnered with the Water Fund to implement Output-Based Aid (OBA) which provides a 60% subsidy for commercial loans to WSPs who in turn will increase connections to low-income areas.

Achievements of the Urban Investments

For the people living in urban low-income settlements, the Urban Investment interventions have brought better health for children and adults, and improved living standards. A survey carried out to assess the impact of water kiosks showed overwhelming acceptance by the residents, who reported improved access to water, a drop in waterborne diseases, improved household hygiene, improved security when fetching water, and an increase in productive and leisure time thanks to less time spent on water duties.

Since 2007, KES 3.6 billion has been invested by the Urban Investment. The impact of these investments is manifold: Approximately two million urban Kenyans have been reached with improved water supply and public sanitation services.

The outputs of the projects include:

• Construction of 646 water kiosks,
• Construction and rehabilitation of 2,013,865 km of pipeline,
• Construction of public sanitation facilities, water storage tanks, yard taps and installation of pumping units,
• Successfully piloted prepaid yard taps with the Nakuru Water and Sanitation Services Company,
• Subsidy provision for household sanitation and commercial loans.

Additional impact has been achieved such as capacity building of water utilities, the launch of MajiData and the development of new technologies.

The Urban Investment successfully piloted the Up-scaling Basic Sanitation for the Urban Poor (UBSUP) programme in three water utilities. The programme aims to improve sanitation at household and plot level. This has been upscaled countrywide and so far 20 water utilities are implementing the 1st Call for Proposals for UBSUP. Marketing of improved SafiSan toilets has been done and solutions along the entire sanitation value chain have been supported. UBSUP aims to reach up to 400,000 people with adequate sanitation.

Key elements of the Urban Investments’ success

A number of factors contribute to the success of the Urban Investment:

• Transparent procedures and funding criteria
• Competitive allocation of funds through Calls for Proposals (“value for money”)
• Embedment in the sector framework: alignment to sector strategies
• Use of local institutions for implementation (only registered water utilities)
• Comprehensive approach: financing + supervision + capacity building of local implementers
• “Going the last mile” with innovative low-cost water and sanitation solutions
• Measuring impact through tailor-made baseline surveys and information systems, and long-term performance monitoring of utilities
• Capacity building of the water utilities to enable them to implement the projects
• Repetition of standardised project cycles allows for continuous improvement
• Use of the county resident monitors in monitoring of the projects

Challenges and future perspectives

Some of the challenges being faced by the Urban Investments include:

• Inadequate funds to finance all the proposals that meet the criteria for funding,
• Slow implementation of the projects by the water utilities. The water utilities are not able to complete the projects within the given periods,
• Initially slow uptake of the UBSUP projects,
• Audit issues contributed to unquestioned costs that the water utilities can address but that were not given any priority.

Future prospects include the opportunity to work with the counties in supplying water and sanitation in the underserved areas of Kenya. Also, there are innovation opportunities for project implementation, data collection and reporting.

> For success stories on our investments, including Urban Investments, explore our stories here

> For further information on the Urban Investments, including pictorial and tabulated achievements, see the Maji Insight 2015-2016 Report available here