riein ne pathways to water stewardship in nairobi › research › water › ... · 2014-12-22 ·...

Smith School of Enterpriseand the Environment

Briefing Note | October 2014 | SSEE Water Programme

BRIEFING NOTE

Pathways to Water Stewardship in Nairobi

Executive Summary.................................. 11 Water Stewardship in Nairobi............. 11.1 Introduction........................................ 11.2 Water stewardship – responding to the challenge.................................................. 21.3 Nairobi City Water.............................. 22. Pathways to Water Stewardship....... 22.1 Irrigated agriculture........................... 22.2 Underground revolution..................... 32.3 Crowd-in capacity and capital............. 32.4 Demand Management........................ 42.5 Portfolio management....................... 43. Enterprise response – Nairobi Water Roundtable......................................... 43.1 Enterprise leadership................... 53.2 Enterprise partnership.................. 53.3 Enterprise responses.................... 54. Conclusion..................................... 5Key references.................................... 6

Executive Summary

Africa’s future growth and development will increasingly rest on how successfully it manages water for its people, businesses and the environment. Nairobi reflects the wider African challenge with some of the ‘numbers’ in its favour through growth, demography and geography but others casting a darker shadow through variable rainfall, groundwater over-abstraction, weak governance, social inequities and failing infrastructure. Improving Nairobi’s water stewardship is a common goal that should unite all sectors of society. Businesses are increasingly responding to this challenge as water inequities require collaboration rather than competition. In response to Nairobi’s major water supply deficit the Nairobi Water Roundtable was established by leading water-dependent enterprises as mechanism to coordinate a collective response to mobilise influence and action. With a common and urgent challenge, the Roundtable includes many of Africa’s leading water-dependent businesses who have embarked on a new and collaborative journey to identify and support initiatives to promote Nairobi’s water stewardship. This briefing note explores the wider context of the Nairobi Water Roundtable, outlines a range of strategic responses, and discusses the future role of the Roundtable as both a driver and catalyst for improved outcomes for growth, development and water stewardship. It concludes by identifying a number of recommendations which promote sustained action for improved water stewardship outcomes that are replicable at scale.

1. Water Stewardship in Nairobi

1.1 Introduction

Nairobi is the economic and industrial hub of east Africa. It is a vibrant city of 3.5 million people convening international and regional enterprises but also home to some of Africa’s largest informal settlements and associated development challenges. Like much of Kenya, Nairobi faces the challenges of unpredictable droughts and floods threatening economic, social and environmental sustainability. Past flood and drought events have had major economic and social impacts in the energy (hydro-power), agriculture, manufacturing, transport and tourism sectors. But Kenya’s status as ‘chronically water insecure’ is more than climate events alone as piped water services are intermittent, of uncertain drinking quality, largely serve a wealthy elite, and fail to recover costs for half the water supplied (World Bank, 2004). Water-dependent enterprises share increasing material and political risks as they compete for highly variable water resources under uncertain governance regimes. This paper outlines the growing water challenges facing Nairobi and the response

The Smith School Water Programme aims to understand and address water-related risk to economic growth, human development and environmental stewardship. For more information please visit our webpage: http://www.smithschool.ox.ac.uk/research/water-programme.or contact: [email protected]

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of the Nairobi Water Roundtable convening a unique and influential gathering of water-dependent enterprise with the support of Kenya Breweries Ltd, which has been operating in Nairobi since 1922.

1.2 Water stewardship – responding to the challenge

Achieving water stewardship in Nairobi faces the stark logic of water demand outstripping supply. The city’s current water supply is 23 per cent lower (170,000 m3 per day) than water demand. The situation is expected to worsen by 2035 to a 63% supply deficit (970,000 m3 per day). The Government of Kenya is actively responding through the Nairobi Water Master Plan which aims to increase supply by 358,000 m3 of water per day. This major and ambitious programme of work requires an investment of USD 2 billion over the next 20 years for Nairobi and 13 satellite towns. To date, just over a quarter of the investment has been secured (28%) from the French Development Agency (AFD) and the World Bank. Initial activities have improved upstream storage and water treatment facilities. How the remaining funds will be secured is uncertain.

The Nairobi Water Master Plan is closely aligned with the government’s f l a g s h i p Vision 2030 p r o g r a m m e to transform Kenya into an industrialising, middle-income c o u n t r y . U n i v e r s a l d r i n k i n g water access is a central objective along with many other water-related initiatives, such as irrigated agriculture. Agriculture currently accounts for 70 per cent of water resource use and ambitious expansion plans include doubling irrigated area by 2030 in the upper Nairobi area.

1.3 Nairobi City Water

Nairobi City Water and Sewerage Company (NCWSC) is responsible to delivering safe water to everyone each and every day. By 2025 the city population is expected to reach 6 million people. Current progress has led to 74 per cent water service coverage for an average of 16 hours per day.

Piped water services not only supply domestic (drinking) demand but also major enterprise users. However, aging infrastructure and illegal connections (known as non-revenue water, NRW) result in 42% losses from water stored, treated and piped to the city. Financial losses are also weakened by a revenue collection rate of 86% of billed water. Addressing both these issues would make available an additional 29 million m3 per year (based on achieving 25% NRW) and an additional USD15 million per year if 100% revenue collection is achieved. To achieve both would require major improvements in bulk and domestic metering, and water payment systems.

2. Pathways to Water Stewardship

Identifying pathways to water stewardship for Nairobi may be considered across at least five dimensions:

1. Catchment protection2. Underground revolution3. Capacity and capital4. Demand management5. Portfolio management

2.1 Catchment protection

Each land use decision translates into a water resource impact. Managing forests, irrigating crops or urban expansion influences surface water flows and availability over time and space. Nairobi’s catchment mosaic is extensive and dynamic where distant land use management has direct linkages to the quantity and quality of water available for the city. For example, inappropriate building in areas where strategic groundwater resources are recharged can have large and negative impacts hidden from public scrutiny and action.

The Nairobi Water Roundtable can respond in at least two ways. First, members can adopt and share best practices in land management both on-site (drainage, recharge, treatment) and in supply chains, such as sourcing agricultural products from well-managed farms with goodwater management practices. This may include drawing on international experience across their Africa footprint or global partnerships to explore new approaches and models.

For example, water trading dramatically reduced irrigated water use while maintaining farmer incomes in a voluntary scheme during a ten year drought period in Australia

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(see figure). Second, the Roundtable has a vested interest in sustainable urban management to promote the growth of Nairobi’s population in a way that establishes water stewardship as an e s s e n t i a l ingredient in the delivery of services and goods that drive e c o n o m i c g r o w t h and human

development. With a clear and collective voice the Roundtable can contribute to wider policy dialogue on urban design that recognises associated water supply, wastewater and drainage implications.

2.2 Underground revolution

Nairobi domestic and industry water consumers have increasingly invested in alternative water supplies given unreliable and insufficient piped water supplies. An escalating challenge is the underground revolution of unsustainable groundwater use (see figure below). A recent assessment of boreholes in the Nairobi Metropolitan area has revealed a doubling of ‘known’ boreholes between 1995 and 2011. Of over 3,500 boreholes located in Nairobi County less than half have abs t r ac t ion permits (47%), two thirds are u n m e t e r e d (63%), and four in five users do not pay for water (78%).

The lack of a Nairobi groundwater management strategy makes fair, efficient and sustainable water use difficult almost impossible. Existing approaches, such as the Groundwater Conservation Area concept, have largely failed. Limited technical knowledge of how Nairobi’s groundwater system responds to recharge (rainfall) and abstraction across

space and time is essential to develop more effective allocation plans for licenced use and pricing. Ideas of managed aquifer recharge depend upon the

development of a credible groundwater model to determine appropriate management strategies. In the meantime, largely unchecked groundwater abstraction will have unknown impacts on the quantity and quality of a strategic water resource for Nairobi.

While groundwater monitoring is absent or incomplete the distributional economic and environmental implications will remain hidden. Without reliable and timely information to make informed and fair decisions the prospects for sustainable groundwater management are guess-work at best. Nairobi will remain ‘water blind’ until regular and accurate measurements on rainfall, water storage, river flows and groundwater abstraction are collated and managed systematically. Until then consumers and enterprises will pay the price in poor service delivery that leads to costly alternatives.

The Roundtable can respond in two ways. First, the group could publish records of their groundwater use and changes in environmental conditions (depth, quality) over time. This would demonstrate leadership and could be pegged against their agreed abstraction permits and payments. Given the distribution of members across the city, these data could also provide an important resource for government groundwater monitoring programmes and attribution of impacts on quality and quantity.Second, the data that emerge could help devise more effective and socially-acceptable groundwater governance arrangements that are based on reliable and timely evidence.

2.3 Capacity and capital

Enterprise can support water stewardship by leveraging capacity and capital. Human capacity in enterprise represents the best of Kenyan and international expertise in specific domains. These domains are where partners may have comparative advantage in developing interventions within existing political networks and targeted geographic regions. Engaging with distant and contentious land use issues may represent reputational and material risks for enterprise with no clear benefit. Alternatively supporting agricultural intermediaries in transitions to more sustainable water resource management regimes may align benefits with investments. Benefits may be financial, hydrological or knowledge-creation that can be shared and disseminated.

International donors increasingly view enterprise as a pivotal development actor and actively support shared initiatives, particularly around reducing poverty. For example, UK DFID awarded Safaricom a large grant to

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develop the MPESA (mobile money) platform – this is now one of the world’s biggest development success stories with major financial returns to Safaricom, and its major UK stakeholder, Vodafone. Strategic alignment with key donors and enterprise could provide new and significant resources to align targeted interventions with shared objectives. Several of Nairobi’s largest enterprises align with major bilateral donors – East African Breweries Ltd/DFID, Coca-Cola/USAID and Tetra Pak/SIDA. Many bilateral donors explicitly favour investments where development impacts and national interests converge. The Roundtable can respond by more directed engagement and inclusion of bilateral donors in the initiative to leverage complementary interests in a more integrated and long-term programme of work both in Nairobi and through national networks.

2.4 Demand Management

Demand management is a key tool to manage water consumption to reduce water resource impacts and promote wider access. When water services reach more people and revenues ensure accelerated access for the excluded, an inclusive political constituency emerges as exemplified in Uganda, Chile and Cambodia. In Nairobi, urban piped water supplies serve the privileged minority who pay less than those with inferior supplies. The political economy of urban water generally ensures power and wealth benefit but new models are charting transformative changes. Learning from international experience of progress and innovation is a low-cost and valuable approach.

Improving revenue collection for Nairobi City Water and Sewerage Company could save USD15 million per year. Evidence from Kenya, Tanzania and Uganda suggest water payment behaviours can be ‘nudged’ with subtle interventions based on mobile platforms. Targeted investments in improving Nairobi’s billing and payment systems could release significant capital to allow wider infrastructure investments, including metering so billing is fair, timely and free from corruption. It is difficult to reconcile multi-million dollar infrastructure investments into improving Nairobi’s piped water network while the company collects below an acceptable benchmark of its own bills.

Nairobi Water and Sewerage Company has recently responded with a major initiative to install 1,200 ‘smart meters’ to monitor water flows and usage in the city with mobile-enabled data transmission. The Roundtable can respond by promoting and piloting local ‘smart water hubs’ adjacent to their operations to complement this

initiative and promote learning in new techniques to reduce non-revenue water at least cost. Global examples of ‘smart cities’ are emerging and pilot zones in Nairobi could be developed in terms of water supply and wastewater recovery. The latter is recognised as a major but often forgotten resource that could improve water stewardship if effectively implemented at appropriate scales.

2.5 Portfolio management

Portfolio management aims to smooth risks in volatile conditions. It is an approach that is emerging in the water sector, particularly where water risks are uncertain with an extreme distribution. The rise of recycling/re-use and desalination reflect this trend as water managers try to minimise risk with investments that co-vary negatively with water supply shocks. In drought events, rainwater harvesting or reforestation interventions will not help. Reducing water risks explicitly means applying economic as well as hydrological expertise. A narrow supply augmentation strategy (land use change, new storage, groundwater abstraction, rainwater harvesting) will be insufficient without demand management instruments which price, trade or negotiate rights and volumes of water. This equally applies to designing operational rules for multi-purpose storage serving water supply, hydro-power, irrigation or flood control. For Nairobi, water reuse or wastewater recycling would diversify water assets and minimise future water shocks.

The Roundtable is uniquely positioned to understand the logic of portfolio management and execution given their business expertise. How portfolio management could be translated to improving Nairobi’s water stewardship is an area where the Roundtable would have expertise and insights.

3. Enterprise response – Nairobi Water Roundtable

Nairobi-based enterprises are responding to the water stewardship issue convened through Kenya Breweries Limited and launched at the ‘Nairobi Water Roundtable’ in September 2013. The goal of the Nairobi Water Roundtable is to work together to achieve water stewardship in Nairobi to promote economic growth, employment and accelerate drinking water access.

The Nairobi Water Roundtable is a coalition of stakeholders from government, industry, donors and environmental conservation. A major advance is the inclusion of Kenya’s leading enterprises, including Kenyan Breweries Ltd (KBL), Coca-Cola Nairobi Bottlers, British

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American Tobacco, Kenya Association of Manufacturers, Tetra Pak (Kenya) with wider industry support. Backing this initiative are the Government of Kenya Water Resource Management Authority (WRMA), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), the International Conservation Union (IUCN) and The Nature Conservancy (TNC).

The objectives of the roundtable meeting were to:

• Build consensus on the current water situation in Nairobi (short and long-term)• Define best practice and opportunities to address the challenge • Gain commitment from leading industry and other organisations to establish a multi-stakeholder task force to advance water conservation and stewardship in Nairobi • Agree clear paths forward, including establishing a lead facilitator for subsequent activities and liaison with government.

The roundtable participants recognised the complex mix of technical, financial and social issues, outlined above. There was recognition that the current water management situation is a significant risk to the social and economic future of the city.

The Nairobi Water Roundtable was established with a core membership group. The aim of the task force is to instigate scalable initiatives to improve water conservation and stewardship for Nairobi. An initial set of objectives include:

• Identify scalable initiatives and associated business case to reduce shared water risks• Instigate a study to assess the economic impacts of water scarcity for Nairobi• Define and agree watershed/river restoration as an initial project

Recognising the need to work together for sustainable water in Nairobi, the members of the Task Force are investing in operational improvements, sharing best practice, scoping high-impact interventions for water stewardship, and lobbying government to catalyse change. Across Africa, this is a novel example of water-dependent, urban-based enterprise independently convening and articulating a shared water risk agenda and determining a long-term approach to respond in the wider public interest.

3.1 Enterprise leadership

The Nairobi Water Roundtable has shown leadership in responding to water stewardship challenges in Nairobi.

Individual commitments with a published plan of action will provide a clearer framework for what level and type of investments each partner is willing to make. The Nairobi Water Roundtable identified initial projects from analysis (economics of water scarcity) to field interventions (reforestation) which were supported by the roundtable. GIZ has supported these initiatives as the coordinating institute given their established expertise in water management and leadership in multi-stakeholder collaborations in water stewardship.. This includes ensuring the Task Force has an agreed charter with identified industry ‘champions’, a medium term strategy and funding for priority activities/interventions. An industry ‘Chair’ and public spokesperson needs to be identified on a rotating basis to underline the commitment for action. Without committed industry champions the Task Force will gain little momentum or public trust.

3.2 Enterprise partnership

The Industry Task Force has unique convening power and international networks to deliver impacts. These span government, environmental NGOs, research/academia and civil society. This provides a valuable and influential platform to shape the debate and advocate for change in an inclusive and progressive manner recognising and supporting existing and effective initiatives. Bringing key actors from agriculture into this conversation is important as well as Nairobi City Water and Sewerage Company. Deepening the partnership can also bring in additional resources, ideas and capacity.

3.3 Enterprise responses

Achieving and maintaining water stewardship in Nairobi is a formidable challenge. Enterprise has extensive expertise and resources which it can mobilise given a social licence to engage. Project-based initiatives that align with industry interests and expertise will minimise risk and maximise positive outcomes. Industry has unique footprints in Nairobi and can pilot initiatives to provide the basis for wider government action based on a clear evidential base.

4. Conclusion

Water stewardship is both an enduring and increasingly urgent challenge for Nairobi. The Nairobi Water Roundtable represents a new coalition of willing and able enterprise drawn from regional and international enterprise leaders. The Roundtable is a first step that establishes the intent and purpose of African water-dependent enterprises to contribute and share in tackling a deeply complex challenge.

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It is not a new challenge but one that brings new and influential organisations together. Nairobi’s citizens have the most to gain and the most to lose from water stewardship and future activities need to consider an effective strategy that has a clear and deliverable purpose to gain their support and trust. Strategic engagement to deliver concrete progress is a key next step in determining how enterprise can constructively engage in improving water stewardship.

Recommendations for the Nairobi Water Roundtable include:

• A flag-ship programme of water stewardship interventions that supports Government priorities with the potential for sustainable impacts at scale;• Partnership with international donors (DFID, GIZ, SIDA) who share the water stewardship agenda and can amplify resources for scalable impacts which benefit the poor and protect vulnerable water systems;• Pool resources for local capacity development of Kenyan’s best and brightest so the future water stewardship leaderships are Kenyan with access to the world’s best education programmes;• Establish a science, enterprise and policy network hosted by leading Kenyan research institutes that share, promote and catalyse best water stewardship practice regionally and across Africa;• Conduct and sustain effective and honest outreach so the Nairobi public is engaged and enthused by the water stewardship initiative to promote participation, engagement and accountability to the goals set.

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Kidson, R., Haddad, B. and Zheng, H. (2009) Improving Water Supply

Reliability through Portfolio Management: Case Study from Southern

California. Proceedings of the 4th IASME / WSEAS Int. Conference on Water

Resources, Hydraulics and Hydrology (WHH’09)

Krolikowski, A. (2013) Wireless Water. Improving Urban Water Provision

through Mobile Finance Innovations. Skoll Centre for Social Entrepreneurship,

Oxford University.

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2011-12. Water Services Regulatory Board, Nairobi.

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WSP (2010) Karnataka Urban Water Sector Improvement Project. 24/7 is

achievable. World Bank, Water and Sanitation Program, Delhi.

Briefing Note - October 2014Smith School of Enterprise and the EnvironmentWater ProgrammeVisit our website - www.smithschool.ox.ac.uk


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