Nairobi Water Fund:

Investing in Water


Protecting an Important Water Source

TNC's Fred Kihara reflects on the importance of the Nairobi Water Fund for millions of people.

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The Tana River supplies 95 percent of the water for Nairobi’s 4 million residents, and for another 5 million people living in the watershed. It also feeds one of the country’s most important agricultural areas and provides half of the country’s hydropower output. With Nairobi contributing 60 percent of the country’s GDP, the Tana River truly fuels Kenya’s economic growth.

Since the 1970s, forests on steep hillsides and areas of wetlands have been converted to agriculture, removing natural areas for storing runoff water and soil from the land. Now, as rain falls over farms, soils are washed down into the river, which reduces the productivity of farmland and sends sediment into the rivers. This increased sedimentation can choke water treatment and distribution facilities causing complete service disruptions for days or weeks at a time. Today, 60 percent of Nairobi’s residents do not have access to a reliable water supply.

This growing challenge requires something innovative to protect the Tana River, increase downstream water quality and quantity and provide positive benefits for tens of thousands of farmers in the watershed. Enter the Upper Tana-Nairobi Water Fund. Water funds are founded on the principle that it is cheaper to prevent water problems at the source than it is to address them further downstream. Public and private donors and major water consumers downstream contribute to the Fund to support upstream water and soil conservation measures, resulting in improved water quality and supply.

The Nairobi Water Fund builds on the Conservancy’s experience addressing similar issues in Latin America, where more than 30 water funds are either underway or in development. This fund is now the first of its kind in Africa, and will serve as a model as leaders across the continent look for innovative ways to solve ever-increasing water challenges.
 

The IMPORTANCE OF FARMERS

There are 300,000 very small farms on the steep slopes in the Upper Tana watershed. Land scarcity and declines in soil productivity drives farmers to expand cultivation into steeper and steeper slopes and riparian catchments. Working with these farmers – starting with those in the steepest and most critical areas – is imperative to reducing the many impacts that are caused by deforestation and this massive sediment runoff.

Together with our Water Fund partners, we are providing nearly 15,000 farmers (like Jane Kabugi) with the training, resources and equipment they need to help keep the river healthy, conserve water and reap the benefits of higher crop yields and more stable farms.

“I had a lot of challenges [living and farming on this hillside],” Jane said. “They showed us the benefits of making trenches to save our soil and save our lives.”
 

ESTABLISHING THE BUSINESS CASE

The Water Fund is seen as a sound investment by utilities and companies who rely on the Tana River. In fact, the fund’s business case showed that a $10 million USD investment in water fund-led conservation interventions is likely to return $21.5 million USD in economic benefits over a 30-year timeframe.

“Ninety-eight percent of our raw material is water, so we have a huge responsibility to participate in water conservation,” said Bob Okello, public affairs director of Coco-Cola East Africa. “This business will only be sustainable if we can maintain a reliable and sustainable source of water not only for industrial use, but also for domestic use for consumers living along the chain.”

Our current partners and investors are: Nairobi City Water & Sewerage Company, Kenya Electricity Generating Company (KenGen), Pentair Inc, Coca Cola, East Africa Breweries Ltd, International Centre for Tropical Agriculture (CIAT), The Government of Kenya, Water Resources Management Authority (WRMA), Tana & Athi Rivers Development Authority (TARDA), International Fund for Agriculture (IFAD) and Frigoken Kenya Ltd.

A lean initial investment from TNC supporters has already led to very high returns in just the first three years. With continued support, we can help ensure the quality and quantity of water needed to sustain a healthy watershed and support Nairobi’s growing population.

 
FURTHER READING

The Upper-Tana Nairobi Water Fund: A Business Case

RIOS Technical Appendix

FutureWater Appendix

Ecosystem Services Appendix

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