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Kenya's sanitation sector receives boost with US$4 million loan from OPEC Fund

136/2005 December 21, Vienna, Austria
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The OPEC Fund for International Development today signed a US$4 million loan agreement with the Republic of Kenya to help upgrade the sanitation network in the northeast Garissa district. The scheme falls within the framework of government’s aim to reform the entire water supply and sewerage sector.

A significant percentage of Kenya’s inhabitants lack access to safe water and sanitation facilities, and as a result, the incidence of water-related illnesses is inordinately high. In addition, the improper handling of wastewater has had a detrimental effect on the environment. These shortfalls are particularly problematic in the district of Garissa, which is home to some 86,000 people. Sanitation coverage is inadequate and the area’s flat topography makes it susceptible to flooding from the nearby Tana River, thus overtaxing the sewerage infrastructure. This situation is expected to worsen in light of the district’s rapidly-growing population.

Under the project, certain sections of the sewerage network will be rehabilitated and expanded through the construction of a 27.5 km-long main sewer line and 41 km of secondary sewer pipes. A fully-equipped pumping station will be built and around 1,000 household connections installed. The existing water treatment plant, which is presently located in an urban area, will be replaced with a new facility in a less populous location and be designed to accommodate future expansion.

Once completed, the scheme will do much to boost the health and wellbeing of numerous communities. Household incomes are anticipated to improve as well, since the time and energy spent on coping with the old infrastructure can instead be directed towards more productive economic activities.

The OPEC Fund has previously approved 16 loans for Kenya, comprising three lines of credit, one balance of payment support loan and one program loan, while 11 others supported projects in the transportation, agriculture, education, health and water and sewerage sectors. Kenya has also benefited from a number of grants, and is a participating country under the WHO/OPEC Fund Initiative against HIV/AIDS in Africa.

Today’s agreement was signed in Vienna by HE Mr. Julius Kandie, Ambassador of Kenya to Austria, and by HE Mr. Jamal Nasser Lootah, Chairman of the Governing Board of the OPEC Fund.

DATA SUMMARY
Project: Garissa Sewerage
Sector: Water Supply and Sewerage
OPEC Fund loan: US$4 million
Lending terms: Interest rate of 1% per annum, with an annual service charge of 1% on amounts withdrawn and outstanding; maturity of 20 years, including a grace period of 5 years.
Borrower: Republic of Kenya
Executing agency: Northern Water Services Board

Implementation period: 2 years
Appraising agency: Arab Bank for Economic Development in Africa (BADEA)
Loan administrator: BADEA

Cofinanciers: BADEA
Government of Kenya

Total cost: US$8.985 million
Project description:

The project will comprise the following:

  • installation of a 27.5 km-long main trunk sewer line, 41 km of secondary sewer networks and a 1.2 km main pipeline, as well as 1,000 property connections;
  • construction of a pumping station with equipment and a water treatment plant;
  • procurement of operation and maintenance equipment; and
  • consultancy services.