- The key focus of the program is on WASH lending, which will support small-scale, private, and public water services providers, households, and enterprises with a strong emphasis on climate-resilient infrastructure and women-owned businesses.
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A blended finance program that will integrate climate action and gender inclusion in (Water, Sanitation, and Hygiene) WASH Financing has been launched.
The initiative by Sidian Bank, Oikocredit, and Aqua aims to leverage Sh1 billion in commercial financing initiatives towards WASH infrastructure projects.
This partnership aims to support Water Utilities through technical assistance and performance-based grants to build capacity for commercial borrowing through enhanced revenues due to mitigated physical and commercial water losses.
Chege Thumbi, Sidian Bank CEO, in a statement said:
“As a bank, we are committed to supporting Sustainable Development Goal 6 by improving access to WASH financing. This includes enabling growth in access to clean, safe drinking water, enhancing sanitation and hygiene conditions, and developing effective water resource management systems."
The program aims to catalyze access to WASH financing and provide resources to improve water and sanitation services in Kenya.
"Our blended finance three-year program integrates climate action and gender inclusion into WASH financing. Blended financing models, which combine revenue-based credit appraisal with individual risk-based methodology and de-risking instruments like portfolio guarantees, have proven to be financially viable," Thumbi added.
"These models support viable projects even when traditional collaterals are insufficient. Our partnership aims to support SMEs and WSPs through targeted lending, technical assistance, and performance-based incentives to enhance water infrastructure, climate-resilient infrastructure, promote sustainable practices, and improve gender equity in access to finance."
He said they expect to reach 3 million people through this program, targeting the issuance of loans to at least 480 MSMEs.
In support of gender inclusion and climate focus, they aim to allocate 40 per cent of the credit facilities to women-led businesses and 60 per cent climate-proof infrastructure facilities to WASH SMEs and Water Service Providers.
Phase III of the tripartite collaboration is set to commence in June 2024 and run through May 2027.
The facility will provide financing solutions that align with the revenue streams of small-scale water providers.
This initiative will unlock the potential for growth, efficiency, and sustainability in the water sector.
Ultimately, it will contribute to increasing access to clean and reliable water supply for the majority of Kenyan citizens, particularly those residing in peri-urban and rural areas.
Josien Sluijs, Managing Director of Aqua for All, on his part, said:
"Climate action and gender inclusion are integral aspects of our partnerships with financial institutions and investors. Recognizing the critical role of private funds in achieving universal access to water and sanitation, we will continue to support the Government of Kenya in attracting more private sector investments. I look forward to implementing this financing program, which will contribute to a climate resilient and equitable access to safe water and sanitation for all in Kenya."
Mirjam ‘t Lam, Managing Director at Oikocredit, said:
“Our new joint initiative promoting affordable and climate-resilient WASH services for Kenyans is an exciting development arising from two of our most valued partnerships.”