Emerging Lessons from Medium Sized Public Private Partnerships (PPPs) in the Kenyan Water Sector

Abstract

In Kenya as many other countries of the world, Government tax revenues are constrained due to population pressures, expanded mandate of governments including social welfare and environmental protection that have resulted in fiscal constraints. The Kenya Water Master plan 2030 estimates that investments of KES 1.7 trillion are needed for rehabilitation and development of new Water Supply infrastructure to realise Vision 2030 goals of 100 percent water coverage and 80 percent sanitation coverage against a budget of KES 561.5 billion leaving a deficit of KES 1.2 trillion for the water sector that needs to be financed through other innovative financing mechanism. The Fiscal constraints experienced in Kenya have resulted in the adoption of Private Partnerships (PPPs) as an innovative approach to the provision and financing of public infrastructure and services such as water and sanitation, electricity and transport to supplement the traditional tax financing of services. This paper explores the genesis of Public-Private partnership (PPPs) projects in the water sector and the processes of project development to share on experiences and lessons learnt from implementing water PPPs in Kenya. Public-Private partnership was adopted by the Government of Kenya to mobilize private sector financing, innovation and management expertise in all sector of the economy including water service provision. The Kenyan Water sector PPPs initiative commenced in May 2013 when the Ministry of Water and Irrigation (MWI) sent out a “call for PPP project proposals” to all Water Service Providers (WSPs). Fifteen WSPs across the country submitted twenty five (25) projects in response to the “call for proposals” which were reviewed and a final six projects from six county Governments’ identified as viable for further development as PPP projects.

Keywords: Private sector, public private partnership (PPP), infrastructure, financing, water services