Nakuru water utility eyes local financing
Nakuru Water and Sanitation Services Company is exploring new financing opportunities to expand water and sanitation infrastructure and improve access to reliable services for households across its service area.
The company’s Corporate Management Team has held a kick-off meeting with the Urban Water Catalyst Initiative (UWCI) transaction adviser, Rebel Group, to begin shaping its water and sanitation projects into bankable investments that can attract financing from domestic financial institutions.
The engagement is focused on developing projects with strong financial and operational structures that can give Kenyan lenders greater confidence to invest in water and sanitation infrastructure. By improving the bankability of its projects, Nakuru Water and Sanitation Services Company seeks to unlock additional resources for expanding and upgrading essential services.
A major aspect of the approach is increasing access to financing denominated in Kenyan shillings. Using local-currency financing can help reduce exposure to foreign exchange fluctuations, which can raise the cost of servicing loans secured in foreign currencies.
For water and sanitation utilities, where revenues are largely collected in local currency, financing projects in Kenyan shillings can provide greater predictability in financial planning and debt repayment. It can also reduce the potential impact of exchange-rate movements on the cost of infrastructure investments.
The initiative further seeks to support the company in reducing dependence on donor-funded projects by developing investments that can attract sustainable domestic financing. This could provide an alternative source of capital for infrastructure development as demand for water and sanitation services continues to grow.
Developing bankable projects requires clear investment plans, sustainable revenue models, sound financial management and demonstrated capacity to operate and maintain infrastructure. The engagement with the transaction adviser is expected to help strengthen these areas and position the company’s priority investments to meet the requirements of potential financiers.
Additional financing could support the expansion and improvement of water distribution systems, sanitation infrastructure and other facilities required to serve a growing population. Increased investment would also create opportunities to extend services to more households while improving the reliability and efficiency of existing systems.
The move comes as water utilities increasingly seek innovative financing models to bridge infrastructure funding gaps and deliver services to a larger number of consumers.
For Nakuru Water and Sanitation Services Company, the focus on domestic financing is intended to create a more sustainable investment pathway, allowing locally generated financial resources to support infrastructure serving local communities.
The collaboration with UWCI and Rebel Group therefore marks an important step towards positioning the company’s water and sanitation projects for investment while strengthening its long-term financial sustainability and capacity to expand services.
