World Bank2014-03-182014-03-182011-09https://hdl.handle.net/10986/17316In Kenya, community run small-scale water systems play a critical role in supplying and improving access to water services in peri-urban and rural areas. This is largely because municipally-owned water services providers currently supply only 25 per cent of the country's population and 39 per cent of the population within their service areas. Historically, under a centralized institutional structure, a large number of communities were tasked with managing and recovering the operating costs of small piped water supply systems installed by government. The importance of these community providers has been recognized in recent reforms of the sector. These provide for a legal and regulatory framework for community based organizations to engage in water service provision outside major towns and cities. However, a host of problems complicate efforts to support these community organizations to become reliable service providers, including their limited management capacity, low operating revenues and lack of access to finance. Efforts to license and regulate the operations of community water projects have been hampered by the slow implementation of policies aimed at decentralizing water service delivery to communities in areas not covered by municipal water services providers. In spite of considerable liquidity within the Kenyan financial sector, domestic banks do not typically finance investments in water infrastructure because of the long term nature of infrastructure finance and the perceived lack of creditworthiness of rural and peri-urban small scale water providers. Efforts to license and regulate the operations of community water projects (CWPs) have been hampered by the slow implementation of policies aimed at decentralizing water service delivery to communities in areas not covered by municipal water services providers. With the considerable public financial resources available in the water sector, the size of the market for a loan linked product is likely to be limited over the medium term. However, public funds are not sufficient to build the infrastructure required to effectively meet the demand for water services: hence the increasing focus on cost recovery tariffs and the considerable initiatives underway to access supplementary financial resources from the private sector.en-USCC BY 3.0 IGOACCESS TO FINANCEACCESS TO FINANCINGACCESS TO WATERADMINISTRATIVE COSTSAFFORDABILITYALTERNATIVE FINANCINGAVERAGE MONTHLY REVENUEAVERAGE MONTHLY WATER BILLBALANCE SHEETBALANCE SHEETSBANK ACCOUNTSBANK DEPOSITSBANK LENDINGBANK LOANBANKSBOOSTER PUMPSBOREHOLESBORROWERBORROWINGBUSINESS DEVELOPMENTBUSINESS DEVELOPMENT SERVICESBUSINESS PLANBUSINESS PLANNINGBUSINESS PLANSCAPACITY BUILDINGCAPITAL COSTCAPITAL COSTSCASH FLOWCASH FLOWSCATCHMENTCATCHMENT AREACATCHMENT LEVELCLEAN WATERCOLLATERALCOMMERCIAL BANKCOMMERCIAL BANKSCOMMERCIAL LENDERSCOMMUNITY GROUPSCOMMUNITY LEADERSCOMMUNITY ORGANIZATIONSCOMMUNITY PROJECTSCOMMUNITY WATERCONNECTION FEESCONTRACTUAL SAVINGSCOST RECOVERYCOST SAVINGSCREDIT ANALYSISCREDIT FACILITYCREDIT GUARANTEECREDIT RISKCREDIT-WORTHINESSCREDITSCREDITWORTHINESSCUBIC METERCUBIC METERSCUSTOMER BASEDAMSDEBTDEBT SERVICEDEBT SERVICE PAYMENTSDEMAND FOR WATERDEPOSITDISTRIBUTION SYSTEMDISTRIBUTION SYSTEMSDOMESTIC USEDOMESTIC WATERDONOR INVESTMENTDONOR RESOURCESEARNINGSECONOMIES OF SCALEENGINEERINGEQUITY CONTRIBUTIONEQUITY CONTRIBUTIONSEQUITY INVESTMENTEQUITY RATIOEXPENDITUREEXPLOITATIONFARMERFILTRATION PLANTFINANCE COSTSFINANCESFINANCIAL ANALYSISFINANCIAL RESOURCESFINANCIAL SUSTAINABILITYFINANCIAL TRACK RECORDFINANCIAL VIABILITYFINANCING COSTSFIRST LOANFIXED MONTHLY FEEGOVERNMENT FUNDINGGRAVITYHIGH INTEREST RATESHOUSEHOLD CONNECTIONHOUSEHOLD CONNECTIONSHOUSEHOLDSINDIVIDUAL CONNECTIONSINDUSTRY REGULATORINTEREST RATESINTERNATIONAL FINANCEINVESTMENT COSTINVESTMENT PLANINVESTMENT PLANNINGIRRIGATIONLACK OF ACCESSLARGE UTILITIESLEAK DETECTIONLEASE FEELENDERLENDERSLENDING DECISIONLENDING POLICIESLIMITED ACCESSLIMITED LIABILITY COMPANYLOANLOAN AMOUNTLOAN APPLICATIONLOAN APPLICATIONSLOAN PORTFOLIOLOAN PRODUCTLOAN REPAYMENTLOAN TERMMAINTENANCE COSTSMAINTENANCE REQUIREMENTSMETERINGMICROFINANCEMICROFINANCE INSTITUTIONSMICROFINANCE LENDINGMONTHLY WATER BILLSMORTGAGEMUNICIPAL WATERNATURAL RESOURCESNUMBER OF CONNECTIONSOPERATING COSTSOPERATIONAL MANAGEMENTOPERATIONAL RISKOUTREACHPARTIAL CREDITPIPED WATERPIPELINEPOOR ACCESSPOTABLE WATERPRIVATE EQUITYPRIVATE OPERATORPRIVATE OPERATORSPROVISION OF WATERPUBLIC FINANCEPUBLIC FUNDSRAINWATERRAINWATER HARVESTINGRECEIPTREGULATORY FRAMEWORKREGULATORY OVERSIGHTREPAYMENT PERIODRISK OF DEFAULTRIVERSRURAL WATERSAFE WATERSANITATIONSANITATION SECTORSANITATION SERVICESSCREENSSECURITIESSERVICE DELIVERYSERVICE PROVIDERSERVICE PROVIDERSSERVICE PROVISIONSERVICE STANDARDSSEWERAGE ASSETSSEWERAGE SERVICESSHALLOW WELLSSOFT LOANSSOURCES OF WATERSPRINGSSTORAGE TANKSSUBSIDY FUNDINGSUPPLY OF WATERSUSTAINABLE SERVICESSUSTAINABLE WATERTARIFF RATESTARIFF REFORMTARIFF STRUCTURETECHNICAL ASSISTANCETECHNICAL SUPPORTTOWNSTREASURY BILLTREATMENT PLANTSUNIONURBAN AREASURBAN COMMUNITYURBAN WATERUTILITY OPERATIONSWATER COMPANIESWATER CONNECTIONSWATER CONSERVATIONWATER COVERAGEWATER FLOWSWATER INFRASTRUCTUREWATER LOSSESWATER PRODUCTIONWATER PROJECTSWATER PROVIDERSWATER QUALITYWATER RESOURCESWATER RESOURCES MANAGEMENTWATER SALESWATER SCHEMEWATER SCHEMESWATER SECTORWATER SERVICEWATER SERVICE DELIVERYWATER SERVICE PROVIDERSWATER SERVICE PROVISIONWATER SERVICESWATER SOURCEWATER SOURCESWATER SUPPLIESWATER SUPPLYWATER SUPPLY SERVICESWATER SUPPLY SYSTEMWATER SUPPLY SYSTEMSWATER SYSTEMWATER SYSTEMSWATER TREATMENTWATER TREATMENT FACILITIESWATER UTILITIESWATER UTILITYWATER VENDORSWELLS10.1596/17316