Funding mechanisms to incentivise sustainable and inclusive water provision in Kenya's arid and semi-arid lands

This paper explores the hypothesis that funding mechanisms such as outcomes-based funding and upfront investment can help to overcome the risk aversion associated with the high capex costs of solar-powered water pumps (SWPs) and hence begin to catalyse SWP market growth in Kenya.

Evidence for the role of SWPs as a reliable source of water in drought periods has been growing since the 2011 drought, one of Kenya’s worst in decades, but one during which villages with SWPs set up displayed a self-sufficiency in water supply. Despite the superior economics of SWPs in the arid and semi-arid lands (ASALs) of Kenya, investment in this technology has overwhelmingly been made through NGO grant financing.This can be a hindrance to sustainability – with the handover of systems being the ultimate goal, rather than the finance system or structure set up to manage these systems.

This research paper evaluates under what conditions SWP systems are commercially viable; what is the impact of non-revenue water (NRW) and the level of tariff on commercial viability; and finally,what are the implications of these findings for the optimal funding mix for the development of sustainable SWP systems.