Local Financing for Sustainable Water and Sanitation Provision in Lake Victoria Region of Kenya:
3RD Progress Report, 31ST AUGUST, 2018.
1.0 PROJECT BACKGROUND

Access to safe water, apart from being an end in itself, is recognized as having a direct determinant effect on almost all other development goals as defined by the SDGs. Globally, access to clean safe drinking water that is sufficient, affordable, physically accessible and acceptable for personal and domestic use is recognized as a fundamental human right and a prerequisite to the realization of all other human rights. (World Water Report 2: Water a Shared Responsibility, UNESCO, 2007)

However, in a number of African Countries, Kenya included, Water supply, sanitation and other basic services are still woefully inadequate as a result of which most African countries did not meet the Millennium Development Goals (MDGs), especially for Water and Sanitation.
In Kenya, only about 53% of the total population is accessing improved water with majority of the underserved being in the low income areas of the rural, peri-urban and informal settlements of the major Urban Areas. The prevailing situation in Kenya is attributed to inadequate financing (funding gap), poor Operation and Maintenance culture and weak targeting in the sector.

Emerging urbanization trends increases pressure on urban services especially water and sanitation and without adequate resources - financial and technical - local authorities and the mandated service providers will not effectively respond to the demand for these basic services. Schools and institutions face an even bigger challenge since they tend to have much more limited capacity to implement sustainable projects given that support systems are weak or non-existent. The provision of sanitation services coupled with pressure to supply water, take a large chunk of the institution’s revenue either directly or indirectly. Institutions located in the peri-urban areas are faced with poor access to WATSAN services forcing them to incur heavy expenses in accessing water some using school transport while others use vendors to supply water for cooking. This cost translates to higher fee for students with negative impact on parents that at times leads to student drop-outs. The students from these learning institutions are compelled to spend significant amount of their learning time to fetch water for personal use at the expense of their academic performance, health risk (often they get water from unprotected sources) and insecurity especially for girls.

2.0 THE PROJECT
In response to limited sector financing, the project has proposed the establishment of an Innovative Integrated Financing Model to bridge the huge financing gap largely responsible for poor water and sanitation status in Kenya and indeed the wider Sub Sahara Africa. Adopting a PPP-based financing model, it is an innovative funding train with a huge scaling potential expected to establish sustainable WASH in secondary schools and water provision to their surroundings. The Model targets contribution from the County Governments, Banking Sector, Civil Society, Secondary Learning Institutions and Development Partners.

2.1 The Project Objectives
2.1.1 Broad Objective:
To promote a Partnership model in Kisumu and Homabay Counties for establishment of Sustainable Decentralized Alternative financing for enhanced access to safe water and proper sanitation in Lake Victoria Region of Kenya with focus of Climate Smart Water and Sanitation Technologies through Secondary Institutions building on the successful School Bus Financing Model.
2.1.2 Specific Objective(s):
With the aim to contribute towards sustained Increase in access to affordable water and proper sanitation in Secondary Learning Institutions through climate smart technologies, the project proposes to:
a) Forge a County Based Partnership involving County Government, Civil Society Organization, Private Sector Bank and a Northern Development Partner ( Aqua For All of the Netherlands), to mobilize resources and establish Water and Sanitation Development Revolving Credit Fund with a capital base of Kshs. 67,275,000 (Euros 611,591);
b) Increase provision of accessible, adequate and reliable Water and Eco-sanitation services to 11,000 students in 20 No learning institutions and 30,000 residents neighbouring the target schools within 3 Years;
c) Establish a regional Water and Sanitation Learning Forum to promote knowledge Management including information sharing, monitor progress in sanitation and the scale up of ecologically friendly sanitation best practices.
3.0 Summary of Performance against Key Planned Activities Period Ending 31st August, 2017
1. Mobilize Partners for Effective participation in the Project.
a. Bi-lateral meetings held with Top Management of each of the original Implementing Partners (Maseno University, Water Department Chief Officers for Kisumu and Homabay, Reflo Industries, and Maji milele).
b. County Level stakeholders Sensitization meetings were held, one each in Kisumu and Homabay Counties. Following decision to involve more counties in response to advise by National Government stakeholders, further sensitization meetings were also conducted for Nakuru, Baringo and Kisii Counties. Following the expanded sensitizations,
Result. Kisii County confirmed interest to participate in the project and positive collaboration has been recorded including launch of 1st VIA Water project in Kenyenya Town.

2. Mobilize National Government For Project Buy-in and Partnership:
The activity has been accomplished with following highlights:
• 3 No Bi-lateral Meetings Held with Ministry of Education Top Management Teams at Nairobi Hqs Office, Sensitization meetings held with County Officials in Homabay, Kisumu, Kakamega, Kisii, Nakuru and Baringo and Held Meeting with National Government CDF Chief Executive Officer
Result: In Homabay County, Kabondo / Kasipul CDF has drilled 1 No Borehole ready for equipping by the project to serve Got Rateng Secondary School and Kadongo Township. In addition, SNV has allocated funds to support Rehabilitation of a 3Km Pipeline with potential to serve one Secondary School, a Kiosk and procure 50 Consumer meters for connecting immediate homesteads.
3. Conduct Rapid Technical Assessment to establish interim feasibility of various technological options for Water Supply and Sanitation Provision in potential schools and Produce Preliminary Water Supply Designs.
• Technical assessment were successfully conducted in 4No utilities with potential to serve 9No secondary schools.
Result: The project was able to draw partnership MOUs with the 4No Utilities.
4. Construct WASH Facilities in 10 No Schools
• The activity delayed owing to the long process of getting actual financial and contractual commitments from originally targeted secondary schools. The decision to shift entry point from schools to Water Service Providers prompted further delays since the buy-in process took time. Project launch was successfully done in 3No secondary schools.
Result: Enhanced confidence on the project amongst project stakeholders.
5. Develop Project Monitoring and Evaluation Framework
• Maseno University developed Project M&E Framework and circulated for adoption and use by partners. The adoption has been low but is anticipated to improve in next quarter once the Knowledge management Intern reports to duty.
Result: Reports for the case studies are ready for sharing.
6. Advertisement of the project call
For wider outreach, the project placed an advert in the National Daily Newspaper inviting expressions of interest from potential schools.
Result: Dismal response with only one school expressing interest, one Water service provider and one Private Water service Provider.
7. Conduct School WASH Status Baseline Study
• Tools for detailed baseline survey developed and ready for use in the next quarter.
Result: template for baseline study produced and will ease implementation once schools open in September,2018
4.0 Constraints/Challenges
1. Delayed Decision on Functional Management Model for Developed Water Infrastructure in Kisumu County. The water department has delayed in providing policy direction on how the newly developed water infrastructure at Awasi and Nyabondo would be managed.
2. Unfavorable Ministry of Education Policy on Development Projects. This has made most of the original target schools to opt- out of the project.
3. Slow pace of accepting the new model
The concept of full cost recovery is new in the sector against a background of poor past performance of potential beneficiary utilities , getting a ‘buy-in’ to accept a loan has proved to be slow.
4. Inadequate Project Implementation Management Capacity amongst Partner Utilities: The project anticipated that project implementation would be managed by the beneficiaries. With schools being beneficiaries as per original model, the approach was tenable. However, with shift to utilities, this proved to be a challenge since most utilities lacked requisite capacity to manage the implementation process including tendering, contracting and contract management.
5. Delay in Processing Loan Approval by Partner Bank. The long approval process significantly affected project physical completion time line and cash flow performance.
6. Budget Constraint
Increased project area coverage and shift to use utilities instead of schools have resulted in increased expenditure especially to travel and other logistical costs.
7. Weak sharing of project experience in Digital Media platform.
The project performed below per in the VIA Water Digital Platform . This has attributed to inadequate Knowledge Management Capacity amongst partners.
5.0 Enabling factors
• Timely release of funds by Aqua for All: Aqua for all has ensured timely release of all requisite funds as requested by SANA.
• Donor Responsiveness: Aqua for All Team provided positive guidance and response whenever called on by the project. The Monitoring Visit by Aqua for All team in 1st Quarter enhanced confidence on the project amongst implementing partners especially County Government officials
• Guidance Support from Project Steering Committee – The Steering Committee continued to engage and deliberate on pertinent issues on the project and gave prompt advice.
• Cordial Working relationship between SANA and Water Sector Stakeholders in the region.

6.0 Conclusion
• In spite of the slow pace of accepting concept of Credit in the Sector, the Project, through intensive sensitization / marketing, has increasingly received positive reception with all key stakeholders recognizing it as a unique innovation with potential to transform access to safe water in Secondary Schools and their immediate surrounding communities.
• The Ministry of Education’s Policy shift regarding extra levies / elimination of Parents sponsored development projects has limited the schools ability to take Full Project Packages (i.e. both Water and Sanitation).
• The shift in Ministry Policy restricting development projects in Secondary schools that came in force immediately the project commenced negatively impacted the project necessitating adjustments in the project model.
7.0 Recommendations
• Review Project Deliverable Projections
• There will be need to explore opportunity for complementary project funding to meet the inevitable expanded expectation.
• The Partner Bank, ought to review her loan processing procedure for greater efficiency as it positions itself to tap on the emerging potential. Specifically, the Bank should avoid unnecessary procedures including project “ charge “ that has long legal procedures and extra costs yet there are existing effective contractual options including "Lien Agreement" with little no extra cost.
• Need For Prompt Policy Decision making by Partner Government partners including County and National Government -Constituency Development Fund