Athi Water taps KRA to plug Sh12bn revenue leak, fund Sh209bn growth plan

THE government has roped in Kenya Revenue Authority to collect revenues for bulk water suppliers in a bid to seal revenue leakages, attract private investment and sustain operations in the increasingly pressured water sector.

Water, Sanitation and Irrigation Cabinet Secretary Eric Mugaa said the move follows amendments to the Water Act 2024 that paved the way for Water Works Development Agencies to operate as bulk water suppliers.

Following the move, Athi Water Works Development Agency and Coast Water Works Development Agency have already been licensed.

“The appointment of KRA as a revenue collector is the first step towards bridging the financing gap in the water sector. It guarantees efficiency, curbs non-revenue water, and strengthens the sustainability of bulk systems while making them more attractive to development partners,” Mugaa said.

The CS noted that Kenya loses about Sh12 billion annually in non-revenue water through illegal connections, faulty metering and billing inefficiencies, a problem KRA is expected to help address through joint meter reading, enhanced oversight, and streamlined dispute resolution.

Mugaa said the reforms come at a time that water demand is set to rise sharply due to the government’s ongoing affordable housing program, rapid urbanisation and new infrastructure projects across Nairobi and its satellite towns.

“The great city of Nairobi is ever-expanding and with it comes with the challenge of providing clean water and sanitation. Without stronger revenue mobilisation and investment, these projects risk being compromised,” he warned.

To meet the challenge, the ministry is banking on blended financing—a mix of public funds, development partner contributions and private sector investment.

“Our call is to development partners who have supported us before, we need you now more than ever. Raising the required revenues will ensure our environment is clean and our people enjoy the benefits of safe water and good health,” Mugaa added.

Athi Water Works Development Agency CEO Joseph Kamau revealed that in the five years between 2023 and 2027, the agency will requires Sh209 billion to implement its strategic plan.

In the plan, the investment will go towards boosting water storage, transmission, distribution and treatment capacity.

Kamau said the financing will come from the exchequer, development partners, private investors, internally generated revenues, and climate funds, with a major emphasis on Public-Private Partnerships (PPPs) as envisioned under Vision 2030.

“The total amount required to implement the 2023-2027 Strategic Plan is estimated to be Sh209 billion, this will be financed through exchequer budgetary allocation, development partners, private sector, Internally Generated Revenues and innovative sources such as climate fund,” said Kamau.

CS Mugaa acknowledged that vandalism, jurisdictional disputes and slow adoption of smart metering technology remain challenges.

He urged water service providers to modernise billing systems and embrace innovation to cut waste and keep pace with global standards.

The strategic plan calls for the construction of new dams that will add a staggering 461,000 cubic meters of daily storage capacity.

This will be complemented by the development of new water sources, expected to contribute an additional 102,500 cubic meters per day. To get this water to residents, the city will build an extensive network of new pipelines.

The plan outlines the installation of 443 kilometers of new transmission lines and 360 kilometers of new distribution lines, ensuring a more robust and reliable delivery system.

Athi Water says there are plans to expand existing water treatment plants, increasing their capacity by 318,500 cubic meters per day.

Simultaneously, wastewater treatment facilities will be upgraded to handle an extra 138,000 cubic meters per day, supported by the construction of 880 kilometers of new sewer networks.