By Nicholas Waitathu
More than 90 percent of registered water companies in Kenya cannot attract loans from both local and international financial institutions due to lack of bankable proposals and poor governance structures.
Water Sector Trust Fund chief executive Ismail Fahmy warned last Friday that 86 out of 94 registered water corporations have governance issues and risks which make financial institutions shy off.
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“The financial flows of these companies are wanting and the institutions suffer from bad governance as their board of directors and management staff do not follow good management practices,” said Fahmy.
He said the firms’ water systems are incurring 50 percent non-revenue loss.
However, he said water companies from Nyeri, Muranga, Nakuru, Kiambu and Kisumu have stronger financial flows and thus can attract loans from both local and international financial institutions. Bankable proposals.
“These companies have bankable proposals, strong board of directors and are able to minimise losses along their water systems,” he added.
This, he said, is attributable to dilapidated infrastructure and obsolete technology which contribute to wastage of the resource.
The water sector, he said, is grappling with low budgetary allocations which contribute to low water production.
The government is only able to provide Sh62 billion annually to finance the water sector which is below the required Sh100 billion.
The sector, Fahmy added, currently needs Sh3.8 billion for repairs.
