(Nairobi) – Co-operative Bank of Kenya has entered a KSh500 million financing agreement with several partners in the water sector to support water and sanitation infrastructure projects aimed at expanding access to clean water and sanitation services in Kenya. This partnership represents a significant step forward in developing sustainable solutions for water and sanitation needs in urban, peri-urban, and rural communities.
The agreement focuses on creating a results-based financing program, accompanied by a robust technical assistance system designed to expand the bank’s Water, Sanitation, and Hygiene (WASH) portfolio across Kenya. This new financing arrangement will allow Co-operative Bank to collaborate closely with Aqua for All, Water.org, and the Water and Sanitation Services Providers Association (WASPA) to ensure effective project implementation.
The bank’s commitment includes more than KSh500 million in loan facilities targeted at medium-sized water and sanitation projects that demonstrate financial viability. This funding will also support local water service providers in their efforts to improve the availability of safe drinking water and sanitation facilities, particularly benefiting communities with limited access.
| Partnership Component | Goal |
|---|---|
| Loan facilities of KSh500 million | Funding for WASH projects |
| Results-based financing program | Performance-linked support for water services |
| Technical assistance and capacity building | Empowering WSPs with skills and knowledge |
| Six-month loan moratorium | Financial ease during construction phase |
To further ease the financial burden on project implementers, Co-op Bank will offer a six-month moratorium on principal loan repayment during the initial project construction phase. Following successful project implementation and completion of loan servicing, the bank will also issue loan rebates, incentivizing project execution and financial sustainability.
Additionally, beneficiaries of this initiative will have access to low-cost financial resources and technical assistance from Co-op Bank, which includes capacity-building support and skills training for project implementers. This support will help ensure that projects are well-structured and sustainable, enhancing their success rates.
Speaking at the partnership announcement event, Lydia Rono, Co-op Bank’s Director for Corporate and Institutional Banking, emphasized the bank’s commitment to aligning with partners who bring extensive experience and expertise in the areas of technical and infrastructure support. Rono expressed optimism that this collaborative approach would lead to meaningful improvements in water and sanitation services for communities across the country.
“Aqua for All will support the bank to disburse Sh500 million to finance at least 15 infrastructure projects which will enhance access to safe drinking water and improved sanitation for 50,000 people in Urban, Peri-urban and rural populations in Kenya,” Rono stated.
Francis Musinguzi, Africa Regional Director at Water.org, highlighted the critical role of technical assistance funding from Water.org in supporting at least 15 water service providers (WSPs) to develop viable project proposals. These proposals will then be submitted to Co-op Bank as part of their commercial loan applications, providing WSPs with greater access to essential resources for their projects.
“We will hire qualified national consultants to work with the pre-qualified WSPs to develop the bankable project proposals while at the same time providing capacity-building skills to the WSPs technical teams and the Co-op Bank’s projects financing team,” Musinguzi explained. These skills will encompass project proposal development, assessment and validation, financial planning, project implementation monitoring, and the recording of measurable project impacts, such as outputs, outcomes, and the number of people served.