Kenya explores private financing to expand water infrastructure
Kenya is exploring alternative financing models to expand water supply and wastewater treatment infrastructure as urbanisation, industrial growth and commercial activities increase demand for reliable services. The proposed Naivasha Special Economic Zone (SEZ) Bulk Water Supply and Wastewater Project illustrates the government’s efforts to attract private investment to support water security, economic development and environmental protection.
The project was designed to provide bulk water supply and wastewater treatment services to households, businesses and industries in Naivasha, Nakuru County. It was structured as a public-private partnership (PPP), with the proposed arrangement involving the design, financing, construction, operation and maintenance of water infrastructure over a long-term period.
The initiative was developed with the involvement of Haskoning and RebelGroup, alongside other partners working to advance infrastructure investment. Project developers indicated that more than 270,000 people could benefit from improved water and sanitation services if the proposed infrastructure is delivered.
However, the project’s status has changed. Kenya’s PPP Directorate reported that termination of the privately initiated proposal was approved in July 2025, leaving open the possibility of pursuing an open competitive tender. The project should therefore be understood as a proposed investment whose future implementation depends on the procurement process and subsequent decisions by the relevant authorities.
Despite this development, the proposal highlights the importance of mobilising additional financing to address Kenya’s water infrastructure needs, particularly in rapidly developing urban and industrial centres.
Naivasha is an important economic centre in Nakuru County, with activities spanning horticulture, tourism, manufacturing and other commercial enterprises. These sectors depend on dependable water supplies to sustain production, support employment and maintain business operations.
As industrial and urban development expands, existing water infrastructure faces increasing pressure to serve households and commercial consumers. Wastewater collection and treatment also become more important as growing populations and businesses generate larger volumes of effluent.
The proposed bulk water project sought to address these challenges by developing infrastructure capable of supporting residential and industrial demand. Its wastewater treatment component was also intended to improve sanitation services and strengthen environmental management.
The project developers identified more than 270,000 potential beneficiaries, underlining the importance of infrastructure planning in an area where economic growth and community water needs increasingly overlap.
Reliable water services are particularly important to horticultural businesses, hotels and other enterprises that depend on consistent supplies. At the same time, households require affordable water for drinking, cooking, cleaning and sanitation.
Water infrastructure expansion must also account for the environmental pressures affecting Lake Naivasha and its catchment.
The lake supports biodiversity, tourism, agriculture and other economic activities. Protecting its water quality is therefore important to both ecological sustainability and local livelihoods.
Poorly managed wastewater can introduce pollutants into rivers, groundwater and lakes, creating risks for aquatic ecosystems and communities. Investment in effective sewerage networks and treatment facilities can help reduce these risks by ensuring that wastewater receives appropriate treatment before discharge.
Where treatment standards and infrastructure permit, reclaimed wastewater can also be reused for suitable non-potable purposes, reducing demand for freshwater resources. Such approaches require effective monitoring and compliance with environmental regulations.
For Kenya, integrating wastewater treatment and water reuse into infrastructure planning can help improve resource efficiency while supporting sustainable urban and industrial development.
The Naivasha proposal forms part of a wider discussion about financing water infrastructure in Kenya.
In October 2025, the State Department for Water and Sanitation outlined financing requirements under the National Water and Sanitation Investment and Financing Plan for 2022–2030. The plan estimated that the sector required KSh995 billion, with KSh313 billion expected through public-private partnerships.
The government has also pursued plans for a Water Sector Investment Platform intended to help Water Works Development Agencies access capital markets and mobilise additional financing for infrastructure development.
These initiatives reflect the scale of investment required to expand water supply, rehabilitate existing systems, improve sewerage coverage and extend services to underserved communities.
PPPs can provide a mechanism for combining public oversight with private capital and technical expertise. However, their effectiveness depends on transparent procurement, sound financial arrangements, appropriate risk allocation and clear performance requirements.
Affordability must also remain central to project planning to ensure that infrastructure investment improves service delivery without imposing unreasonable costs on consumers.
The Naivasha proposal demonstrates the opportunities and complexities associated with attracting private investment into water infrastructure. While the proposed project could support households and businesses, its future depends on the procurement process and decisions by the responsible authorities.
As Kenya pursues industrialisation, urban growth and wider access to safe water and sanitation, investment in bulk supply, wastewater treatment and environmental protection will remain essential.
The challenge is not only to mobilise funding but also to ensure that projects are financially viable, environmentally responsible and capable of delivering reliable services to communities over the long term.
