Project:The Nairobi Water Fund: hydrologic modelling and economic valuation of investment options
Cliënt:The Nature Conservancy
Partners:Natural Capital Project (NatCap), Stanford University.
Doel:To provide quantitative information on the technical and economic feasibility of the different investment options for the Nairobi Water Fund in three high-priority catchments of the Upper Tana River basin in Kenya.

In 2013 The Nature Conservancy (TNC) started working to launch the first Water Fund in Africa to restore and protect the condition of the Tana River and improve Nairobi’s water security. Key questions that needed to be answered were “Where and in what activities should the fund invest its money?” and “What will be returns on that investment, in terms of improved agricultural production, base flow, sediment, and the value accrued to major fund partners like KENGEN and Nairobi Water Supply?” These questions were addressed during this study by providing quantitative information on the technical and economic feasibility of the establishment of a Water Fund in three selected priority watershed in the Upper Tana River basin.

The Nature Conservancy (TNC) has established more than a dozen Water Funds in Latin America and the United States that are helping protect water sources for millions of people. These Water Funds function like endowments: they are capitalized to a sufficient level to generate substantial earnings annually, which are then disbursed for conservation, ensuring a sustainable revenue stream.

TNC has now started working with local partners to launch the first Water Fund in Africa to restore and protect the condition of the Tana River and improve Nairobi’s water security. In 2011, The Nature Conservancy began a formal scoping study to determine the potential for Water Fund support and development in the Tana River catchment, Kenya. Among the many aspects of the scoping study, was outreach to the Green Water Credits (GWC) program in which FutureWater has been involved actively over the last five years.

Since a healthy watershed minimizes water treatment costs, Water Funds typically attract voluntary contributions from large water users downstream, such as water utilities, hydroelectric companies, agriculture associations or industries. Water Funds make a variety of water protection activities possible, such as changing agricultural practices to reduce erosion and providing micro-finance for livelihoods that reduce deforestation pressure. For the Nairobi Water Fund, a partnership is established among others with the Nairobi City Water and Sewerage Company, KenGen, TARDA (Tana and Athi River Development Authority) and Water Resources Management Authority (WRMA).

Major goals of the water fund will be to address problems of erosion and high sediment loads in streams causing high water treatment costs and reservoir capacity loss, and to focus on sustainable land management practices that will help to augment base flows and ensure adequate water supply for downstream services as hydropower production. Key questions that need to be answered during this study are “Where and in what activities should the fund invest its money?” and “What will be returns on that investment, in terms of improved agricultural production, base flow, sediment, and the value accrued to major fund partners like KENGEN and Nairobi Water Supply?”

FutureWater will address these questions by providing quantitative information on the technical and economic feasibility of the establishment of a Water Fund in three selected priority watershed in the Upper Tana River basin. A close collaboration will be established with researchers of Stanford University of the Natural Capital Project that are also part of the Nairobi Water Fund technical team. FutureWater will carry out detailed hydrological modeling and analyze the impacts of investment options and interventions in the Upper Tana catchment, being prioritized by by NatCap using software that standardizes water fund investment design by identifying priority areas for watershed investments based on biophysical, economic, and logistical constraints and stakeholder preferences. This will define the endowment goal and the investments necessary to accomplish the Nairobi Water Fund.

Publicaties

  • 2016 - Journal of Environmental ManagementVogl, A.L., B.P. Bryant, J.E. Hunink, S. Wolny, C. Apse, P. Droogers. 2016. Valuing investments in sustainable land management in the Upper Tana River basin, Kenya. Journal of Environmental Management. http://dx.doi.org/10.1016/j.jenvman.2016.10.013.X

    Valuing investments in sustainable land management in the Upper Tana River basin, Kenya

    Vogl, A.L., B.P. Bryant, J.E. Hunink, S. Wolny, C. Apse, P. Droogers

  • 2015 - FutureWater Report 133Hunink, J.E., P. Droogers. 2015. Impact Assessment of Investment Portfolios for Business Case Development of the Nairobi Water Fund in the Upper Tana River, Kenya. FutureWater Report 133X

    Impact Assessment of Investment Portfolios for Business Case Development of the Nairobi Water Fund in the Upper Tana River, Kenya

    Hunink, J.E., P. Droogers

  • 2014 - International Journal of Biodiversity Science, Ecosystem Services & ManagementKauffman, S., P. Droogers, J.E. Hunink, B. Mwaniki, F. Muchena, P. Gicheru, P. Bindraban, D. Onduru, R. Cleveringa, J. Bouma. 2014. Green Water Credits - exploring its potential to enhance ecosystem services by reducing soil erosion in the Upper Tana basin, Kenya. International Journal of Biodiversity Science, Ecosystem Services & Management 10: 133-143X

    Green Water Credits – exploring its potential to enhance ecosystem services by reducing soil erosion in the Upper Tana basin, Kenya

    Kauffman, S., P. Droogers, J.E. Hunink, B. Mwaniki, F. Muchena, P. Gicheru, P. Bindraban, D. Onduru, R. Cleveringa, J. Bouma