30 October 2012: The World Bank’s Water and Sanitation Program (WSP) has funded an innovative social connection programme that offers micro-loans with flexible repayment mechanisms for water access to low-income populations in Kenya. The initiative responds to new constitutional water and sanitation rights in the country.

Despite resident’s willingness to pay for improved water supplies, high prices for the installment of individual metered water connection have been a challenge for informal settlements in Kenya. The need to offer drinking water and sewerage services for low-income populations at affordable prices led the World Bank’s Water and Sanitation Program (WSP) to establish a partnership among the Athi Water Services Board (AWSB), the Nairobi City Water and Sewerage Company (NCWSC) and the K-Rep Bank.

The Kayole Soweto village, in the outskirts of Nairobi, is the first to benefit from the initiative through a pilot project that can potentially reach 90,000 residents. The goal is to expand loans to cover the initial US$100 water connection fee proposed by the NCWSC, which includes a non-refundable commitment fee, deposit for water meter, and costs of piping and fittings. The role of the World Bank is to facilitate these micro-loans for newly signed customers of NCWSC through an output subsidy from the World Bank’s Global Partnership on Output-based Aid (GPOBA) offered to the local K-Rep Bank.

Among the innovations, customers have the possibility to pay their water bills via phone, including the initial installment costs of piped water. This initiative will particularly improve water access in under-served communities, reflecting the need to comply with new constitutional rights in Kenya establishing that all citizens have the right to water and sanitary services. [WSP Press Release]