Water Services Trust Fund

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The future of WSTF in Water and Sanitation: Challenges and Prospects

WASPA CONFERENCE THEME:

Sustaining gains in the provision of quality water & sewerage services.

Eng. Jacqueline Musyoki, (Mrs.), OGW,

Chief Executive Officer

Contents:

• Introduction to WSTF’s Funding Windows

• Projects under different windows

• Development Partners supporting them

• Challenges

• Way forward

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IntroductionMandate:• To assist in financing the provision of water services to

areas of Kenya without adequate water services.

Vision:• To be a dynamic and innovative leader nationally and

in Africa in the financing of the water sector.

INTRODUCTIONCore values• Accountability, transparency and good

governance• Teamwork, equity and fairness• Honesty and intergrity• Customer focus• Life – work -balance5 strategic objectives

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Strategic Objectives1. To mobilize resources nationally and internationally to enhance

provision of water services.

2. To develop and apply systems that ensure proper targeting, financing, implementation and sustainability of water and sanitation projects.

3. To establish and nurture partnerships with stakeholders.

4. To continuously strengthen the WSTF institutional capacity and enhance staff skills to ensure effective and efficient service delivery.

5. To facilitate capacity building of agents to deliver on the provision of water services.

WSTF achievement on Sector Reform• WSTF has a delineated role of financing• CBOs and WRUAs directly responsible for the

WSS and WRM implementation• Equitable allocation achieved by the Target

Locations, MAJI Data surveys and Alarm catchments

• Pro Poor targeting in CPC and UPC

Objective 1. Resource Mobilization

• WSTF started in 2004 265 million with SIDA/DANIDA funding

• SIDA and DANIDA funded WSTF for 6 years until 2010

• New donors came on board (EU/KfW, UNICEF, Government of Finland)

• Presently WSTF a financing channel of choice for WRM and pro-poor WSS funding

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FUNDED PROJECTS SINCE 2004Window No . Of projects

fundedWSTF contribution

Total population to be served

Population benefiting

NON-CPC 107 853,270,870 800,667 640,534

CPC 164 850,626,512(committed)

714,159 365,000 (Completed CPC = 62)

UPC 66 – water13 - sanitation

731,000,000Contracted amt.

726,000 280,000

WDC 100 65,000,000 N/A Training Funds

OBA 36 PILOT(K-REP) Nil 95,000 4,000

UNICEF 786 605 m490 m disbursed

Target 1.61M New users & 0.31M Rehabilitated

1.61 million

TOTAL Approx.4M 758,534

GOK16%

SIDA26%

DANIDA16%

UNICEF11%

EU8%

KFW9%

GoF10%

Others4%

Distribution of income by investor

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Arrangement for pro-poor rural and urban investments

Big Investments realized directly by WSBs

Water Services Boards Financing

Contract

WSTF

- Capacity Building

- Monitoring and Evaluation

through Pool of Consultants, NGOs

Implementing body

CPCCommunity Project Cycle:

- point sources - small systemsFunds: € 20 Mio SIDA, DANIDA

UPC URBAN POOR CONCEPT:

- Water kiosks - Basic sanitation (public & private)

Funds: € KfW 5,5 Mio; EU 10,375 Mio

(Cofinanced by KfW and GTZ)

ruralurban

€WSP/

Community/WRUAs

WRMA

WDCEuro 500,Million

SIDACatchment Protection

and Improvement

Objective 2: Systems development

i. (CPC) – system for rural window.ii. (UPC) – system for low income urban areas. iii. (WDC) –system of climate change adaptation.iv. (OBA) - This is an innovative credit based finance

productv. Maji Datavi. External and Internal Auditingvii. Impact Study

1. Rural Window: (CPC)Partners:

SIDA, DANIDA, AfDB, WB

Background and Status:

• CPC is only implemented in Target Locations

• Approximately 400 Target Locations identified (Kenya has 4,000 locations!)

• CPC Target Locations - identified by all stakeholders in 2005

• CPC started in 2007, after the development of the CPC tools

• A total of 243 projects have been approved so far

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Objectives for the Community Project Cycle (CPC) • Enhance capacity of communities to manage

water and sanitation facilities• Promote delineation of roles within the water

sector • Ensure Transparency and equity in targeted

areas • Ensure mainstreaming of cross cutting issues

at community levels

CHALLENGES, CPC • Many incidents of poor design and wrong assumptions

leading to non delivery of agreed outputs.• Without strong support from the SOs, the CBOs experience

difficulties in procurement and contracting of works, financial management accounting and may lead to corrupt ion.

• Lack of synchronization of donor funding cycles with CBO funding contracts leads to long delays in project implementation

• Use of QCA by the WSBs to check on the quality of works enhances project outputs

Lessons Learnt, CPC• Low capacity of the WSB and SOs to

undertake overall coordination and support the CBOs respectfully.

• Number of funded and completed projects vary from each WSB depending on board area and staffing levels.

• Recruitment of competent SOs and enhancing their capacities through induction and training is critical to output realization.

2. Urban Window:

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Urban Window:Partners:

KfW, EU, GTZ, UN-Habitat, GoK

Concept development:

• Pilot Projects implemented between October 2007- June 2008 (they serve approximately 220,000 residents)

Objectives:• Construction of new kiosks • Rehabilitation of kiosks • Pipeline extension & installation of elevated tanksStatus and Up-scaling of the UPC:• 66 water & 13 projects on sanitation approved within various WSPs.• Expected beneficiaries – 726,000 people• 3 Calls for proposals done so far

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CHALLENGES• Poor quality of proposals• Procurement delays• Sites acquisition difficulties• Funding sanitation• WSP project team turnover• WSB and WSP

management involvement• Monthly WSP reporting• VAT exemptions• Capacity of contractors• Contractor’s terms

LESSONS LEARNT• Need to start procurement

early• Land/sites negotiations

early• Quality monitoring• Timely disbursements• Continuous feedback• Standardize contracts• Definite increase in

revenue, e.g. Mumias

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Some of the WSTF-funded rural and urban projects

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3.0 WDC Funding Window :This window address issues on water resources management.• Project proposals are developed by WRUA’s (facilitated by WRMA Regional

offices) then submitted to WSTF for appraisal and funding consideration. Partners and Funding: Sida was to contribute KSh. 470 million; GoK and WRUAs contribute KSh. 30

millionObjectives: • Improve on Catchment Management/protection• Increase Water flows in the water Catchment areas• Mitigate on floods and drought• Reduce water conflict by usersStatus:• So far 100 WRUAs have been funded for training and preparation of SCMPs• WSTF appraising more WRUA proposals .

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Objectives of the WRUA DEVELOPMENT CYCLE (WDC)• Improve quality and quantity of water

resources• Improve catchment areas• Improve governance in water resources• Improve compliance to regulation• Develop WRUAs

2.0 WDC Challenges

(i) Slow project implementation resulting in low/slow absorption of funds & failure to meet donor deadlines

(ii) Poor and delayed reporting on implemented WRUA activities resulting in delayed action plans

(iii) Low literacy levels of WRUAs in financial accounting resulting in inability/ delayed accounting of disbursed funds by the WRUAs

(iv) Inadequate monitoring of the WRUA activities resulting in stalling of some of the WRUA activities

(v) Poor understanding of the WDC concept by SOs resulting in low quality outputs such as low quality SCMPs

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2.0 WDC Challenges…

(vi) Inadequate capacity ( funds/transport/personnel) of WRMA to support WRUAs implement their activities

(vii) Gender imbalance in management committees.(viii) Inactive committees due to conflict of interests by

management committee(ix) Misappropriation of project funds by WRUAs(x) Lack of / poor labeling of project facilities(xi) Audit queries arising from poor bookkeeping by

WRUAs & inability of WRMA to disseminate financial accounting knowledge to the WRUAs

(xii) Poor quality proposals for instance SCMP budgets submitted with huge lump sum figures without breakdowns making the appraisal process difficult

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Lessons Learnt WDC• WRUAs have wide range of eligible activities –

sand dams, fish ponds, tree nurseries, river pegging, water allocation, joint intakes

• Demand is very high• Awareness is created and expectations are

high• WDC a preferred funding channel for Climate

Change Mitigation

UNICEF-WASH Programme:Our partners: UNICEF, GoK, Netherlands’ Government

Objectives: • Providing 1.3 million people with clean drinking water

• Rehabilitating water schemes to reach 310,000 beneficiaries

• Targeting 21 districts in arid & semi-arid regions, flood prone areas

Funding wstf:

Total kshs 1.9 billion .

Approx. kshs. 490 million already disbursed targeting 200,000 people.

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MajiData (the pro-poor urban database):Partners:MoWI, GTZ, UN-HabitatActivities:• The carrying out of a pro-poor mapping exercise• Detailed data is collected in and on all low income urban areas • Data on population, current water supply & sanitation (WSS) situation, housing,

solid waste, socio-economic activities & infrastructure, land ownership, etc.Objectives: • Improving water supply & sanitation in urban low income areas • Enable Water Services Providers to prepare proposals for WSTF • Strengthen the capacity of WSPs to manage WSS schemes • Enable the Sector to assess the current WSS situation and monitor the impact of

programmes and their contribution to the achievement of MDGs & Vision 2030 objectives

NB/ - Data collected on more than 152 low income urban areas (LVNWSB & LVSWSB completed) currently in RWSB and AWSB

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Ecosan Projects:

Partners:Ecosan promotion project has been implementedby GTZ & SIDA

Funding:KSh 25 million for Phase I and KSh 16 million for Phase II

Status:• The pilot project was implemented at Naivasha Bus Park• Lessons learned resulted in a new public facility design >>• A roll-out programme with WSTF is planned for 2009 – 2010• It will be implemented by WSPs & CWPs using the UPC and CPC

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Output-Based Aid:40% of the total loan is a subsidy > If the target is met!

Objectives:

•Water supply via boreholes, dams

•Rehabilitation of old water schemes

•Formation of WSPs in immediate area.

Current status:

•KSh 41 million deposited in WSTF account

•10 No. CWPs funded – at different stages of implementation.

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Output-Based Aid (OBA):Partners & funding:

• The WSP of the World Bank

• Collaboration with micro finance specialist K-REP Bank.

How it works:

• CWSPs contribute 20% of total project cost

• WSTF pays SOs to assist communities to prepare proposals

• K-REP bank gives 80% of total project cost as a loan

• Loan CWPs at 16% per annum

• Subsidy after meeting the targets set

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Objective 3: Partnerships Established

• Steering committees developed for Rural and Urban Windows

• PMU for UNICEF • New Partners in Investment

and Capacity Building• Web site• WSTF is receiving a lot of

interest Water Resources Management Officers during a one on one meeting with WSTF

Objective 4: Building Capacity of WSTF

Policies :• Performance Contract and Staff Appraisals• Anti corruption, Code of Ethics , Gender Policy,

HR, Training, HIV/AIDS, Disability• Tax compliance Training:– Corporate Governance, Project Management,

Auditing, Financial Management, Risk Management, team Building, Cross Cutting issues,Ethics and Anticorruption workshops

Objective 5: Building Capacity of AgentsObjective of the Capacity building: Improve

the efficiency and impact of the project implementation

Training of WRMA officers, 150 people UPC 64 Water Service Providers 22 Field Monitors in Project Management 60 CPC Agents (WSB, SO) have been

trained for project management

CHALLENGES • Low absorption capacity of local partners• Government of Kenya support• Alignment with Constitution 2010 may

present a new institutional framework and delays in the implementation

• Need to manage drought prone areas sustainably

• Harmonization of different funding streams

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Prospects at WSTF•Good Governance - the Trust Fund has elaborate systems in place to ensure Good Governance•Gender balance – Trust Fund is promoting gender balance through involving women in the management of the CBOs. This is stipulated in the contracts made with the CBOs. Women are being trained to operate the facilities. •Disability mainstreaming.

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Prospects at WSTF•Environment and Climate Change – the diminishing of the water resources is one of the most pressing environmental threats in Kenya•HIV/AIDS - the Trust Fund reaches a large number of communities through its activities. HIV/AIDS prevention is integrated in all community interface activities •ISO certification ; Trust Fund has join the organizations which are ISO 9001:2008 certified.

VISION FOR FUTURE• Alignment with the Constitution 2010• Bill of Rights – WSTF actions supporting citizens

right to water• Up scaling of sanitation • Diversification and flexibility• Revision of systems for effectiveness and

efficiency • Mitigating the climate change and recurrent

drought with proper management and allocation of resources

Vision for future, cont.• Partnering with the county governments• Improved communication and coordination• Database development – urban and rural• Improved partnerships• Professionalism in the water sector• Better regulation of all water services – setting

standards and monitoring frameworks

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