World Bank urges loans for water service providers

Kenyans cannot access clean drinking water and proper hygiene because water service providers (WSPs) are either human resource-incapacitated or lack financial muscle to cover demand on the ground. Despite a deliberate move by the government to enforce water reforms since 2002, it has been difficult since the efforts do not seem to have borne fruit for many WSPs—a number of them embroiled in mismanagement of resources.

Access to potable water, according to a World Bank survey, has always been a challenge to development, and as a result the global lender is pushing for commercial water credits to help WSPs financially, to provide water and sanitation services uninterrupted.
In Kenya, millions of shillings have been channeled to water and sanitation services but the returns remain disappointing.

Water Services Regulatory Board (WASREB) chief executive Robert Gakubia says if the board succeeds with a number of strategies it has put in place, water will no longer be a scarce commodity. “We have put in place an enabling environment to enhance water and sanitation service provision in the country by issuing licenses to water service boards based on specific technical and financial criteria and approving service provision agreements between them and WSPs,” he said recently in relation to promotion of commercial sustainability.

However, he said financing for infrastructural development will depend on the WSPs’ ability to pay back the loans such as strong cash flows and quality management.
A 2011 credit rating conducted on 43 local WSPs showed 13 utilities were ready for commercial financing, while 14 others were classified as having potential to comply, with a small level of improvement.

The World Bank, in a draft report, singled out Nyeri Water and Sewerage Company, Nairobi City Water and Sewerage Company and Mombasa Water and Sewerage Company as some of the best performing in the country out of 17 WSPs in Africa surveyed.
The report concludes that the three companies are ripe for commercial loans.

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