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UNESCO-IHE Institute for Water Education, Delft (2018)

Pro-poor intervention programs and their influence on financial sustainability of pro-poor projects : study of two Kenyan water utilities

Muleta, Abdi Shibru

Titre : Pro-poor intervention programs and their influence on financial sustainability of pro-poor projects : study of two Kenyan water utilities

Auteur : Muleta, Abdi Shibru

Université de soutenance : UNESCO-IHE Institute for Water Education, Delft

Grade : Master of Science (MS) 2018

Résumé
An average of annual population growth by 5% in urban settings of Sub-Saharan Africa resulted in highly populated informal settlements. Expansion of water and sanitation services remain a major challenge in those settlements due to lack of sufficient funds for infrastructure development and lack of land ownership by poor households. Moreover, there is a perception by policy-makers, regulators and utilities that low-income consumers are not financially viable. Most utilities suffered vandalism of network and resulting high water loss in the low-income settlement due to less service coverage reaching poor households. These challenges in provision of water services drew the attention of looking for alternative ways of addressing the urban poor through pro-poor programs. Thus, the main purpose of this study is to assess financial viability of low-income consumers through examining pro-poor projects with the use pre-paid meters and water kiosks at two water utilities in Kenya. The study employed a case study method and relevant financial as well as related nonfinancial data were reviewed and first-hand information were collected through direct interaction with key respondents. The study used a financial model to make cash flow projections over certain period taking into consideration the current conditions of pre-paid meters and water kiosks as well as future expected changes such as inflation rates (Canetti, 1991), change in water tariff, and population growth to determine projects’ internal rate of return. Internal Rate of Return is the method that the study used to determine financial sustainability of pro-poor projects. Based on the assessment of financial data and projections made, implementation of pro-poor projects involving pre-paid meters and water kiosks are financially sustainable. However, water kiosk projects are more sustainable than pre-paid meters. Pre-paid meters remain sustainable if only the utility carries out regular supervision and maintenance activities, otherwise, they will sooner become financial burden and the utility may knock out use the meters. The study identified some scenarios that the utility may consider to towards ensuring financial viability of pre-paid meters. On the other hand, water kiosks are more sustainable and require less skills for operation and maintenance. While maintaining financial sustainability of kiosks, the utility remains with the responsibility to enforce water tariff that is approved by the regulator to protect low-income households from financial exploitation by kiosk operators.

Sujets  : water services water utilities urban poor financial sustainability Kenya

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Page publiée le 25 décembre 2019