How the Water Funds model took hold in Kenya

Water Funds in action — a story from Kenya

The Tana River supplies 95% of the water for Nairobi’s 4 million residents, and for another 5 million people living in the watershed. It also feeds one of Kenya’s most important agricultural areas and provides half of the country’s hydropower output. With Nairobi contributing 60% of the country’s GDP, the Tana River truly fuels Kenya’s economic growth.

Since the 1970s, forests on steep hillsides and areas of wetlands have been converted to agriculture, removing natural areas for storing runoff water and soil from the land. As rain falls over farms, soils are washed down into the river, which reduces the productivity of farmland and sends sediment into the rivers. This increased sedimentation can choke water treatment and distribution facilities causing complete service disruptions for days or weeks at a time. Today, 60% of Nairobi’s residents do not have access to a reliable water supply.

This growing challenge requires something innovative to protect the Tana River, increase downstream water quality and quantity and provide positive benefits for tens of thousands of farmers in the watershed. The Upper Tana-Nairobi Water Fund is the first of its kind in Africa and is increasingly serving as a model as leaders across the continent look for innovative ways to solve ever-increasing water challenges (The Nature Conservancy has spent 20 years addressing similar issues in Latin America, where more than 30 water funds are either underway or in development).

The Upper Tana Water Fund, building on a model of watershed protection first developed in the Americas, works with farms to reduce soil erosion. This work is highlighted in the following video, whilst more information can also be found here.

Since its founding in 2015, the Water Fund has gone from strength to strength, in part due to the buy-in from important stakeholders such as Nairobi Water and Sewerage Company.

Here is an overview of the Water Fund and its roots, from two of the most important protagonists in its founding.

TNC’s Africa Water Funds Director, Fred Kihara, explains how he came to be working on water security in the region, the roots of the Upper Tana-Nairobi Water Fund and how he is spreading the Water Fund model regionally.

The ex-CEO of Nairobi Water, Philip Gichuki, looks at why a Water Fund was considered worth investing in, when certain key moments took place and the significance of seeing other Water Funds — such as those in Brazil — in operation.

The importance of making the ‘Business Case’

The Upper Tana-Nairobi Water Fund is a good example of how a business case can be made for source water protection — and upstream investments come to be seen as sound propositions by utilities and other companies that rely on the water.

“Ninety-eight percent of our raw material is water, so we have a huge responsibility to participate in water conservation …. This business will only be sustainable if we can maintain a reliable and sustainable source of water not only for industrial use, but also for domestic use for consumers living along the chain.” — Bob Okello, Public Affairs Director of Coca-Cola East Africa (Source:

Key other partners include the local water company, the national hydropower company and a range of other corporate and government partners.

The business case showed that a $10 million USD investment in water fund-led conservation interventions is likely to return $21.5 million USD in economic benefits over a 30-year timeframe.

In this video, Fred Kihara of TNC talks about the Upper Tana Nairobi Water Fund, highlighting its origins and drivers, the springboard of an overseas ‘learning journey’, the role of founding partners and a solid business case, and, lastly, the importance of fundraising.

This slideshow summarises the approach of the Water Fund, and highlights which stakeholders are sharing the benefits:

Go here for full show —

What value accrues to partners in the Water Fund?

Whether it be the capital’s water company, the national hydropower agency or corporations relying on water for their operations, each finds value in the Water Fund model being pioneered in Nairobi.

The presentation below explains how this plays out for the Upper Tana Nairobi Water Fund, focusing on the business case and the engagement with corporate partners.

Recording of a presentation made for an IUCN Business for Nature Webinar in June 2019. Go here for a PDF summary of the Upper Tana-Nairobi Water Fund:

In the below video, Philip and Fred discuss the drivers that lead a water utility to join the Water Fund, the benefits derived by the utility and the experience of working in partnership. They briefly cover how to tie upstream activities to downstream benefits, showing what sort of win-win model can be expected.

Philip then explains how the investment of time and championing by Nairobi Water boosted the development of the Upper Tana-Nairobi Water Fund. He also talks about the leverage of winning prizes at Africa Utility Week and the overall philosophy of catchment conservation — as viewed from the utility point of view.

Finally, Fred discusses some of the early challenges faced by the Upper Tana-Nairobi Water Fund, TNC’s issues around scaling up and building local implementation capacity and recent developments in terms of monitoring, ICT etc. Filmed in September 2020.

Find more on Water Funds at




The Nature Conservancy is one of the world's largest conservation organisations. Water security is amongst our top priorites-follow this account to know more.

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Resilient Watersheds

Resilient Watersheds

The Nature Conservancy is one of the world's largest conservation organisations. Water security is amongst our top priorites-follow this account to know more.