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Nairobi Water Fund:

Investing in Clean, Reliable Water for Today and Tomorrow

Kenya’s potential for sustainable development is bound to the health of the Tana River. It is the primary source of water for people, crops, livestock and much of the wildlife in Kenya. The Tana River’s upper reaches provides drinking water for 4 million people in Nairobi and the river’s strong currents generate 60% of electricity for homes and businesses. The Tana River also powers business in rapidly growing Nairobi, from the beverage industry to the construction sector.  

Starting in the “water towers” of Aberdare National Park (3850masl) and Mount Kenya World Heritage Site (5199masl), the Tana River flows through land filled with over one million farm families before draining into the Seven Forks Hydropower Stations and into the internationally recognized wetlands of the Tana Delta, now a RAMSAR site.  

According to the United Nations, Kenya is a chronically water scarce country where less than one-third of residents have access to an improved water source. As rain flows over the small farms in the upper Tana, it can pull soil into rivers and streams reducing the productivity of farmland, reducing drinking water quality for farming communities, and impacting downstream electricity generation and Nairobi’s water intakes. Nairobi’s water utility reports that, during the wet season, their water treatment costs often increase by more than one third as this runoff fills diversion equipment and chokes treatment facilities. In addition, streams and small rivers can become a trickle in the dry season in places where water uptake and runoff are not well managed.  

As is often the case elsewhere in Africa and around the world, water quality and availability is compromised by lack of timely investment in the “green infrastructure” of the watershed. But smart choices and investments today can help avert a dire cycle. The Nature Conservancy is bringing people together to find shared solutions to these shared challenges, and create a brighter future for Nairobi’s water, through the Nairobi Water Fund.

Capitalizing on a Proven Model

In 2000, TNC helped develop a Water Fund in Quito, Ecuador, with an initial investment of only $21,000 USD. Today the fund stands at more than $10 million USD. There are now more than a dozen Water Funds in Latin America and the United States that are helping protect water sources for millions of people.

Many of these Water Funds function like endowments. They are capitalized to a sufficient level to generate substantial earnings annually, which are then disbursed for conservation, ensuring a sustainable revenue stream. The model has a flexible structure that can be easily adapted to meet local opportunities, needs and laws.

Since a healthy watershed minimizes water treatment costs, Water Funds typically attract voluntary contributions from large water users downstream, such as water utilities, hydroelectric companies, agriculture associations or industries. Water Funds make a variety of water protection activities possible, such as changing agricultural practices to reduce erosion and providing micro-finance for livelihoods that reduce deforestation pressure.

TNC is now working with local partners to launch the first Water Fund in Africa to restore and protect the condition of the Tana River and improve Nairobi’s water security.

Working with Business, Government, and Local Communities

The idea of a Water Fund is rapidly gaining traction in Kenya, and a Nairobi Water Fund Steering Committee is now in place to guide and launch the project. This Steering Committee includes representatives from Kenya’s primary power utility (KENGEN), Nairobi Water and Sewerage Company, Kenya’s Water Resources Management Authority and The Nature Conservancy and benefits from engagement from other key stakeholders such as East African Breweries and the United Nations Development Programme.

We have completed a technical feasibility study, providing TNC and the Steering Committee with data on the opportunities for addressing sediment runoff and water availability issues in the Tana Basin. Working with local stakeholders and potential payers, we have also identified a set of priority upper Tana River watersheds where communities have expressed interest in implementing sustainable land and water use practices that can generate meaningful benefits for downstream users.

In the coming year, we will use state-of-the-art modeling techniques to define the endowment goal and the investments necessary to accomplish our shared Water Fund goals. To demonstrate on-the-ground effectiveness in our priority watersheds, TNC has launched three pilot projects on agricultural lands and a monitoring program to track progress.

Our goal for the Nairobi Water Fund is simple: to conserve one of Kenya’s most essential natural assets by addressing threats to water security at its source; ensuring good quality, adequate supply and lower costs to treat and distribute water – all key returns generated by targeted investments in watershed conservation.   

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