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This activity's objective is to support the Government of Kenya through analytical work to expand its policy options on affordable housing. It also aims to help the government better mobilize public sector resources towards making housing more affordable, efficient, and equitable for lower-income households.
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This project planned to scale up the Kenya Power and Lighting Company's model of delivering electricity connections in to the poor in urban and peri-urban areas in Nairobi through use of a small, targeted, subsidy.
The estimated US$50 subsidy per household would be disbursed based on the "output" of connecting a household to the national grid infrastructure. The subsidy was to be used only in informal settlements, initially Kibera, but with the potential to expand into other settlements.
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This activity provided funding for a scoping study to determine feasibility of establishing an OBA Finance Facility in Kenya. The study provided institutional and operational design for the fund. Technical,operational and financial analysis on eight Water and Sanitation projects were also included, including Ruira-Juja, Mathira, Muranga, Nyahururu, Garissa, Meru, Nithi, and Kahuti.
Inputs from the study were included in the commitment paper for the subsidy project, which passed Eligibility in July 2012 and were to be presented to the Panel of Experts for commitment in November 2012.
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This activity funded technical assistance to prepare the subsidy project's commitment paper for the subsidy project. Activities included:
- Demand and pricing study for connections to water and sewerage.
- Refined project design details, including output verification.
- Technical and Financial analysis of the Nairobi City Water and Sewerage Company (NCWSC).
- Cost estimates for implementation and community mobilization.
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The GPRBA team is collaborating with the Bank’s regional GPURL unit and the Water Global Practice to undertake an evaluative study in the informal settlement of Kayole-Soweto, an informal settlement in Nairobi, which has benefitted from multiple GPRBA and other World Bank programs.
This study aims to understand how access to basic services, such as improved water and sanitation, electricity, streetlights, and roads, have helped transform the community. The activity is linked to the World Bank’s Second Kenya Informal Settlements Improvement Project.
A local firm, Kounkuey Design Initiative (KDI), completed the study in December 2021. The study documents residents’ perspectives of the physical and socio-economic changes that have taken place in Kayole-Soweto over the last decade and provides detailed recommendations for future investments. It was organized around the following thematic areas:
• Integrated infrastructure and services upgrading
• Socio-economic change
• Spatial, social, and economic inclusion and participation
• Shocks and stresses: COVID-19 and managing risk
• Maintenance and sustainability
• Learning for future investments
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In Kenya, rapid urbanization has huge implications for water use and wastewater management in the country’s cities, which are already facing increasing water and sanitation demands, such as pollution and overexploitation. GPRBA's water and sanitation project in Nairobi provided about 85,000 people in the city's informal settlements with access to water service and connections to the sewerage network.
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"This paper proposes a framework that examines three levels of access to infrastructure -- nominal, effective, and quality-adjusted access. Most conventional indicators measure nominal access --whether a household has physical access to a service in or near the house. By contrast, effective access incorporates functionality and use of service, and quality-adjusted access raises the bar by incorporating quality metrics. The paper illustrates the analytical utility of this conceptual framework by deploying data from a survey of 14,200 households in 15 Kenyan cities in 2012-13.
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This note describes efforts by the government of Kenya, the World Bank and other development partners to improve access to commercial finance for water and sanitation projects, within the context of sector reforms and innovative financing initiatives.
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Image: Shutterstock
Given the significant financing gap to meet the needs of developing countries and achieve the United Nations’ Sustainable Development Goals*, governments, multilaterals and other development partners are increasingly looking to the private sector to help fill this gap. This means applying innovative financing instruments which address investor risks to help crowd in private capital, optimizing the use of scarce public resources to advance development objectives. However, this leads to another challenge—how do we achieve inclusive development while remaining attractive to the private sector?
Results-based financing (RBF) approaches provide innovative financing solutions that link funding to actual results. By shifting the focus to results, RBF enables stronger service provider and/or implementing agency accountability and provides flexibility for innovation and thus efficiency in the means to achieve those results. While a variety of RBF instruments exist to achieve a multitude of objectives, these core features make RBF an important tool for addressing specific investment barriers and strengthening blended finance approaches.
RBF adds value to blended finance investments through:
- Reduction of repayment risk: RBF can leverage private investment by reducing the risk to lenders through performance/results-based grants paid to project implementers against pre-agreed results.
- Inclusion of the poor: As private capital providers have been reluctant to lend to projects primarily targeting low-income consumers, RBF can provide the incentive for them to do so.
- Complementing other de-risking financial instruments: RBF has successfully been used alongside other risk-mitigating instruments such as partial credit guarantees.
Over the past 15 years, the Global Partnership on Output-Based Aid (GPOBA) has been building evidence on the ability of RBF to mobilize additional resources through a diverse portfolio of projects involving a mix of private finance, results-based grants and guarantees to deliver basic services to low-income communities. The following examples provide lessons on how these projects can be replicated in other countries.
Maximizing Finance for Development for the Poor (Blended Finance Overview)
Extending Access to Clean Energy for Low-Income Households in Rural Bangladesh
Expanding Hygienic Sanitation in Rural Bangladesh with Microfinance
Expanding Electrification to Low-Income Households in Rural Ghana with Microfinance
Building the Market for Urban Sanitation in Ghana
Kenya: Using Private Financing to Improve Water Services
*Based on current estimates, it could cost as much as US$4.5 trillion a year to meet the SDGs.