Sidian Bank, Oikocredit, and Aqua for All launched the third phase of their partnership, a €7,407,407 initiative focusing on financing WASH (Water, Sanitation, and Hygiene) projects with a strong emphasis on climate resilience and gender inclusivity. This partnership aims to support SMEs and water service providers (WSPs) through targeted lending, technical assistance, and performance-based grants to enhance water infrastructure, promote sustainable practices, and improve gender equity in access to finance.
Phase III of the tripartite collaboration between Sidian Bank Limited, Oikocredit, and Aqua for All is set to commence in June 2024 and run through May 2027. This initiative aims to catalyze financing and provide essential resources to enhance water and sanitation services in Kenya, with a focus on WASH (Water, Sanitation, and Hygiene) lending. The program supports small-scale water service providers, households, and WASH SMEs, emphasizing climate-resilient infrastructure and women-owned businesses. A technical assistance and performance-based grant totaling €207,000 will be allocated for staff training, procurement of technical expertise, and market activation. The project targets the disbursement of 480 loans, reaching 3 million people, with a loan amount target of €7,407,407. Additionally, the program has a strong gender and climate focus, aiming to allocate 40% of loans to women-led businesses and 60% to WASH SMEs and water service providers.
The facility will provide financing solutions that align with the revenue streams of small-scale water providers. This initiative will unlock the potential for growth, efficiency, and sustainability in the water sector. Ultimately, it will contribute to increasing access to clean and reliable water supply for the majority of Kenyan citizens, particularly those residing in peri-urban and rural areas.
Chege Thumbi, Sidian Bank CEO: “As a bank, we are committed to supporting Sustainable Development Goal 6 by improving access to WASH financing. This includes enabling growth in access to clean, safe drinking water, enhancing sanitation and hygiene conditions, and developing effective water resource management systems. Today, we are pleased to launch Phase III of WASH Financing in partnership with Aqua for All and Oikocredit. This program aims to catalyze access to WASH financing and provide resources to improve water and sanitation services in Kenya. “
“Our blended three-year program integrates climate action and gender inclusion into WASH financing. Blended financing models, which combine revenue-based credit appraisal with individual risk-based methodology and de-risking instruments like portfolio guarantees, have proven to be financially viable. These models support viable projects even when traditional collaterals are insufficient. The key focus of this program is on WASH lending, supporting small-scale, private and public water service providers, households, and enterprises. We emphasize climate-resilient infrastructure and women-owned businesses. Our partnership aims to support SMEs and WSPs through targeted lending, technical assistance, and performance-based incentives to enhance water infrastructure, promote sustainable practices, and improve gender equity in access to finance.
We expect to reach 3 million people through this program, targeting the issuance of loans to at least 480 MSMEs. In support of gender inclusion and climate focus, we aim to allocate 40% of the credit facilities to women-led businesses and 60% to SMEs in the WASH sector and WSPs.”
Over the past two years, Sidian Bank has successfully implemented the Covid-19 WASH Loan Facility, a €4 million loan initiative launched in August 2020 aimed at supporting micro, small, and medium-sized enterprises (MSMEs) and small-scale WSPs in Kenya amidst the challenges and opportunities presented by the pandemic. Its primary goal was to safeguard continued access to essential water and sanitation services during the crisis and recovery phases. In it first two years, the program has benefited approximately 1.39 million individuals, created 3,266 jobs, and supported 627 enterprises, including financing for six WSPs. The investments, totaling €5 million, have facilitated minor infrastructure and pipeline rehabilitations, solar pumping system installations, and the procurement of essential WASH assets and supplies.
Building on this success, Sidian Bank, in collaboration with Aqua for All and Oikocredit, established the Challenge Fund, a three-year initiative starting January 2023, to further enhance access to safe drinking water. This fund provides loans ranging from KES 300,000 to 10,000,000, covering up to 80% of project costs, with subsidies and technical support to ensure project sustainability. With an initial focus on regions including Kajiado, Kiambu, Machakos, Makueni, Nairobi, and Nakuru, the Challenge Fund targets small-scale piped water providers serving at least 300 households. As we continue to support these vital projects, the grant amount stands at €233,607, with ongoing funding efforts to meet our ambitious goals.
Sidian Bank will roll out a new revenue-based financing model to provide financing for SSWPs based on cashflows. This means that the SSWPs will be able to pay back the loans using the revenue generated from their water services. This innovative approach tackles the lack of traditional collateral, which has been a significant obstacle in the water sector.
“At Aqua for All, climate action and gender inclusion are integral aspects of our partnerships with financial institutions and investors. We are excited about the launch of this new programme with Sidian Bank, building on our collaboration to increase access to WASH financing in Kenya since 2020. We are equally delighted to have Oikocredit as a partner in our mission to catalyse impact-first investments in the Kenyan WASH sector. Recognising the critical role of private funds in achieving universal access to water and sanitation, we will continue to support the Government of Kenya in attracting more private sector investments. I look forward to implementing this financing programme, which will contribute to a climate resilient and equitable access to safe water and sanitation for all in Kenya,” said Josien Sluijs, Managing Director Aqua for All.
Mirjam ‘t Lam, Managing Director at Oikocredit, said: “We are delighted to be launching, together with our Kenyan inclusive finance partner Sidian Bank and our global foundation strategic partner Aqua for All, a new program to provide additional access to water and sanitation financing for low-income communities. Our new joint initiative promoting affordable and climate-resilient WASH services for Kenyans is an exciting development arising from two of our most valued partnerships.”
Sidian Bank is intentional about supporting the development of SDG-6 through the Sidian WASH Programme to ensure access of clean water and sanitation for all Kenyans.
Africa Regional Director, Oikocredit – Caroline Mulwa, Sidian Bank CEO -Chege Thumbi and Ingwell Kuil – Embassy of the Netherlands sign the partnership
Caroline Mulwa – Africa Regional Director, Oikocredit believes this collaboration will go a long way in alleviating poverty and improving the health and well-being of the communities
Sidian Bank CEO – Chege Thumbi happy to announce the launch Phase 3 of Water Sanitation and Hygiene (WASH) Financing in partnership with Aqua for All and Oikocredit
Ingwel Kuil of the Embassy of Netherlands, Africa Regional Director, Oikocredit – Caroline Mulwa, Sidian Bank CEO – Chege Thumbi pose after the partnership signing
Ms Eva Schreuder, Head of Water Division, Ministry of Foreign Affairs of the Netherlands thanks customers for supporting the partnership.
Ingwel Kuil and Executive from the Embassy of the Netherlands excited about the potential of WASH MSMEs to create positive climate, gender, and sustainable impacts
Loise Mwangi, Head of Branches kickstarts the meeting by warmly welcoming the guests
The official launch of the partnership together with key stakeholders
