The project of SANA aimed to pilot a local funding model to support WASH in secondary schools. Based on a successful school bus loan system, the funding model would include 1/3 bank loan, 1/3 pre-payment from schools and 1/3 government funding; while Aqua for All would provide a guarantee to the bank of the same amount. The systems would become financially sustainable through vending of water in the surrounding communities.
The initiative encountered a number of challenges which forced SANA to modify the concept. The first challenges were in the legal framework. The Government put a halt to the common practice of Secondary Schools to take loans for non-educational activities and the Government regulated the interest rates for loans. This reduced the appetite of many schools to participate. SANA changed the model in which it would take the loan from Stanbic Bank (instead of the schools) and the would provide a loan to local utilities around the selected schools. The utilities (or the related authorities) contributed in-kind by drilling new boreholes. As a consequence, the emphasis of the project changed from sanitation to water supply.
Revenues for the small utilities are raised with the support of another credit, made available by VOX Impulse. The prognosis is that both loans will be repaid in a period of 6 to 8 years. The original guarantee of Aqua for All is reduced to the level of the actual loan and the difference is used to compensate SANA for the delays and some extra investments.
- The project resulted in 29 public water points and 285 house connections with 4 small utilities, reaching 7 schools, 3,872 pupils and 14,500 citizens with safe water supply. This is half of the planned number, while no sanitation facilities were made.
- The potential of the original model was reduced due to two main interventions from the central government
- Both Stanbic Bank and Aqua for All (and later VOX Impulse) have shown high flexibility to adapt to the changing conditions
- If the small Utilities will repay the loans, it will be one of the first cases in Kenya in which utilities cover part of their CAPEX investments through revenues
Tips for the future
- Funding models are vulnerable for changes in the legal environment
- Business model for water schemes requires home connections to become financially viable
Potential for growth
Despite the set-backs the modified model is still showing potential and has set an example for other Financiers that repayment for Capital Investments is possible, even in the water sector.
SANA International, Stanbic Bank, local secondary schools, small utilities and authorities
December 2016 - June 2019
(the guarantee fund is still in place after the closure of the contract)
Homa Bay, Kenya
Last project updates
Water supply, sanitation and other basic services are still woefully inadequate in many regions of the world and as a result most countries did not meet the Millennium Development Goals (MDGs), especially for sanitation. Although there is an ongoing debate about the needs and attention given to hardware and software in water and sanitation service provision, there is no doubt that new approaches are needed. 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. Similarly, slum areas, informal settlements and peri urban areas of towns, and rural areas are also faced with the same problems.
Due to inadequate financing (funding gap) and weak targeting in the sector, access to safe water and proper sanitation remains a critical challenge with only about 53% of the total population accessing improved water with majority of the underserved being in the low income areas of the rural, peri-urban and informal settlements. Women and girl child are the most disadvantaged in the society as a direct consequence of the poor status of Water, Sanitation and Hygiene Sector since they suffer disproportionately from the scarcity of water and poor sanitation and hygiene as they are the sole collectors of domestic water in Kenya as is in the rest of African Society.
Waste management is one of the most important of services posing serious challenge to schools and institutions. Waste generation has been increasing with modernization of schools infrastructure, student population expansion and incorporation of waterborne systems. This has led to explosion in the generation of waste which has caused an increase in greenhouse gas emissions, health and financial problems for many schools and institutions. These sanitation services coupled with pressure to supply water, take a large chunk of the institution’s revenue either directly or indirectly hence the need to invest heavily in learning institutions to support
effective watsan access and enhance efficiency in resource utilization and minimize strain on the institution’s meager resources for benefit of the parents and improved learning environment for the students.
Lake Victoria region has been selected for the pilot owing to comparatively low access to safe water, having the 2nd lowest coverage compared to other regions of Kenya, with corresponding high incidence of water and sanitation related diseases. Secondary leaning institutions have specifically been selected due to their high demand for access to safe water and proper sanitation on one hand and their capability to participate in the proposed financing model. Specifically, the model needs institutions with proven financial track records which most secondary schools have based on the successful Bus Purchase Financing Model. The two selected Urban Areas, Kisumu and Homabay, falls within counties where SANA has development presence hence ease of operation apart from confidence and Trust that is necessary for the project success. Their water and sanitation coverage rates also falls significantly below the national target for urban areas in Kenya.
While the urban areas in Kenya have relatively better water and sanitation coverage compared to the rural areas, the peri-urban and informal settlements of the urban areas are faced with general low watsan coverage. Incidentally majority of the Learning Institutions are located in the peri-urban areas hence they 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 spent 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.
Needy Secondary schools having poor access to safe water and proper sanitation in Homa Bay and Kisumu Counties
Project will ensure adoption of sound commercial management principles including production of Business Plan and management of the Utility as a Social Enterprise that fulfills both the social interest of enhanced access to safe water to the school / neighbouring community as it also ensures full cost recovery with provision for surplus income estimated at Kshs 5,400,000 (Euro 49091) per annum. The project also has inbuilt up-scale provision with potential to raise upto 8times of the original investment cost within 3 years. At the end of Pilot Phase, apart from the initial investment by Aqua for All, the project would have a Cash balance of Kshs 20,707,987 ie Euros 18,825.4 and having reached double the original number of Schools.
Requisite Institutional capacity shall be established including:
• Ensuring project ownership through formally binding partnership agreement signed with the School;
• Establish a Multistakeholder Project Steering Committee ( PSC) constituted by CEOs of the Partner Organizations
• Establish a project Implementation team ( PIT) Constituted by the partner organization Team Leaders
• Securing of requisite project approval by the Government Authority,
• Formation of a School level WASH project development subcommittee to co-ordinate the implementation of the project and act as a link with the School Board of Management and SANA.
• Train the School WASH Development Subcommittee on WASH Project implementation management, and WASH project Governance including O& M management skills
• Ensure adherence to Water Sector Governance requirements including registration of a School owned Water Enterprise Entity to facilitate acquisition of Service Provision Agreement with Water Service Regulatory Authority / County Government to allow sell of excess water to immediate community / households
It is the tradition of SANA International to conduct Environmental Impact Assessment for all her projects as part of the implementation process in adherence to National environmental Authority requirements. In the proposed project, Environmental Sustainability has been given prominence with specific focus:
• Undertaking Environmental Scan in each target project. This will involve participatory identification ( together with key stakeholders) of the project impact (both negative and positive), identification of feasible mitigation measures, and development of mitigation plan;
• Climate Smart Technologies: Recognizing the serious threat paused by Climate the project propose to promote Climate Smart WASH technologies including (i) Water Recycling and Reuse, (ii) Biogas production and use with direct positive impact on deforestation (iii) Use of sludge from sanitation facilities to promote greening of school environment.
To ensure that the facilities are technically sustainable specific site designs Will be developed as informed by technical assessments per site. Key consideration in producing the designs is efficiency and effectiveness of the technology to meet the demand on a sustained basis. This particularly will be informed by spares accessibility on a sustained manner. Requisite capacity for sustained Operation and Maintenance will also be established in each beneficiary school through training of locally based resource persons. SANA will particularly facilitate an on-job tailor made training targeting local resource persons during the mandatory Professional Management period undertaken by SANA appointed Professional Water Utility Manager
Overview of Goals
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.
Results and indicators
- An operational locally managed Water and Sanitation sector financing facility with a minimum capital base of Euros 454545.45
- Euros 454545.45 Euros 454545.45 ( target )
- The least total amount of money to be established within the Water and Sanitation Facility
- Enhanced access to Safe Water Source benefiting 11,000 School Population
- 10 water infrastructures constructed 10 ( target )
- The project will construct 10 water sources within 10 schools
- Enhanced access to safe water source to 30,000 household population neighbouring partner leaning institutions
- 30,000 household population accessing safe water 30,000 ( target )
- 30,000 people will be able to access safe water within the 10 water project constructed in the schools
- Enhanced access to improved sanitation facilities benefiting 11,000 School Population.
- 11,000 student population having improved access to sanitation facilities 11,000 school population reached ( target )
- Adoption of biogas as a major source of cooking energy in the 4 partner school leading to significant reduction in cost of energy for cooking in the schools
- 4 biogas constructed in 4 schools 4 ( target )
- The project will constructed 4 bio centers in 4 schools
- Adoption of water recycling and reuse in the partner schools leading to reduced cost of water service provision in the schools
- 10 number water recycling systems 10 ( target )