Twenty-two staff members of the Cooperative Bank of Kenya participated in KIWASH’s training on water sector financing held on March 16 in Nairobi. The KIWASH technical finance advisor and a water sector regulatory expert provided participants with practical knowledge on understanding the water sector, financing opportunities, the importance of USAID’s Development Credit Authority (DCA) guarantee and other available credit enhancements to reduce lending risk to the sector.
Through DCA, USAID shares risk, or guarantees loans from commercial banks like Cooperative Bank of Kenya to water utilities in order to improve water access and quality.
KIWASH provides training to help increase utilization of the guarantee by commercial banks that have signed the guarantee for lending to the water sector. The Co-operative Bank of Kenya signed the guarantee in September 2016.
During the training, KIWASH shared information and helped clarify to the bankers a) an overview of the water sector and key resources on creditworthy water service providers (WSPs) b) financing opportunities in the sector and case studies of projects successfully financed c) examples of a financing proposal and prospects.
After the training, participants who included the head of corporate banking, legal officer, senior corporate managers, small and medium enterprise relationship managers, and risk analysts drew up action points towards lending to the water sector. The bankers said that they were now able to offer water companies solutions tailor made to their needs. Further, they would review and reconsider proposals from water companies that they had previously declined to finance due to limited knowledge on the nature of the sector.
“This training has demystified the sector to me and shows there are untapped opportunities for lending to the water sector”, said Grace Rimui, Acting Head Corporate Credit Analysis.
KIWASH, in collaboration with the Water Services Regulatory Board (WASREB), plan to conduct similar training for other commercial banks in Kenya to create awareness about USAID’s DCA guarantee and opportunities for financing the water sector.