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OPPORTUNITES, ACHIEVEMENT AND LESSONS LEARNT IN SECURING PRIVATE - - PowerPoint PPT Presentation
OPPORTUNITES, ACHIEVEMENT AND LESSONS LEARNT IN SECURING PRIVATE - - PowerPoint PPT Presentation
OPPORTUNITES, ACHIEVEMENT AND LESSONS LEARNT IN SECURING PRIVATE FINANCING FOR THE WATER SECTOR A CASE FOR KENYA MICROFIANNCE TO COMMMUNITY WATER PROJECTS El Elly Aguk Aguko Head of Public Secto tor Banking Ec Ecobank Limite ted
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Urban Water Service Providers Ga Gap Progressive rural/peri- urban communities / system rehabilitation& extension
The context and current status Financing gap
Water Services Trust Fund GOK & Donor, NGO Funded Poorest Rural Communities
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- Micro-finance Bank:- Established in 1999 , with 33
branches country wide
- Main Bank Products: Microfinance Loans, Small and
Medium Enterprises, deposit mobilisation/saving. K-Rep Perspective-Opportunity & Water Sector
Community Water Projects are just bigger groups just like the
microfinance groups we have lent to in the last 20 years
There is demand for investment due to an absence of capital funds -
despite good performance and strong cashflows
Positive strides made in water sector regulatory environment
that allows private sector participation and commercialization
- f service provision
Credible Partner –Subsidies and PDF Facility (WSP, GPOBA, EU, DFID,
IFC, DGIS)
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In 2003, WSP-Af starting Conceptualizing on design of
Output Based Aid subsidy program blending micro-credit and Output based Subsidies under Kenya Microfinance to Community Water projects
2007: Grant agreement signed between World Bank and K-
Rep Bank-Microfinance
As at December 2012 a total of 35 communities been funded
under the program
Total Investment as at June 2013 USD $3.5 in Credit Finance
and 1.6 Million beneficiaries Contribution
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BY: Elly Aguko
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Proporti tion of Tota tal Project t Cost t Organization During Construction (%) After Outputs Achieved Commercial Bank 80 40 Beneficiaries Contribution 20 20 Output Based Subsidy 40 Total 100 100
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Infrastr tructu ture Investm tment t
Amount t in USD D % Contr tributi tion Total Project Cost 5,250,202 100% Loan from K-Rep Bank
3,528,483 67.2%
Beneficiaries Contribution
1,281, 542 24.4%
Contribution from Government Institutions
440,176 8.4%
Project Audit Services
228,203
Project Development and Implementation Grants
802,927
No of Beneficiaries with increased access to safe water
209,081 331% Change
No of Benefiting Households
28,399 319% change
OBA Subsidies -Infrastructure
1,744,047 34%
Per Capita Investment
25
Per capita Subsidy
9
Average Subsidy per household
187.5
Increase in revenue Collection
242%
Average Efficiency in revenue Collection
83%
No of New Jobs created at CWPs
91
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Ite tem De Descripti tion Pilot t Phase Sc Scaled up up Pha Phase se Tota tal
Expression of demand (EOD) received
24 57 81
EOD Positively appraised by K-Rep Bank
13 43 56
Project Rejected
3 7 10 Project Approved for PD 10 36 46 Project withdrawn 6 3 9 Loan application received 13 35 48 Loan Application Approved 13 32 45 Loan Disbursed 10 25 35
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Challenges Challenges Opportu tuniti ties Water a is seen as social good Secure increased access to larger the poor beneficiaries Limited grant financing Leverage appropriate commercial financing through Localized blending Bank rarely lend beyond 7-10 years Built credit rating to support to justify increased access to longer term commercial lending Water Assets provide only limited collateral Credit rating can support investment- grade utilities to access finance from domestic market Utilities often not conversant with lending criteria of Commercial Bank Utilities takes the lead in indentifying and preparing viable projects for appraisal by commercial lenders Investment should be sized to fit the debt capacity of CWPs
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