EXAMPLE: Upper Tana Nairobi Water Fund
An example of how tools were selected for the Nairobi Water Fund, Kenya is provided below
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STEP 1. WHAT TO CONSIDER: questions to be answered.
ANSWER: Is the proposed water fund financially viable? What is the total economic return on investment to major stakeholders - water supply (avoided treatment costs), hydropower (increased power generation and/or efficiency), landowners (agricultural productivity), and others?
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STEP 2. WHAT TO CONSIDER: ecosystem services modeled.
ANSWER: Sediment retention, water regulation (dry season baseflow), annual water supply.
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STEP 3. WHAT TO CONSIDER: audiences of outputs.
ANSWER: Nairobi Water & Sewer Company, Kengen (hydropower operator), potential and existing philanthropic funders, other local stakeholders (NGOs, WRMAs, bottling companies).
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STEP 4. WHAT TO CONSIDER: existing models.
ANSWER: SWAT.
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STEP 5. WHAT TO CONSIDER: Spatial extent.
ANSWER: 3 priority sub-watersheds of the Upper Tana Basin that were identified in a previous modeling study as priority for the water fund to work in.
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STEP 6. WHAT TO CONSIDER: Data availability.
ANSWER: Used some global data (soils, DEM, land cover); updated land cover with google earth imagery; climate, streamflow and sediment data from local authorities; economic data on water treatment cost from Nairobi Water & Sewer Company; no data shared by Kengen on their operations so we relied to literature-based assumptions to estimate their economic benefits.
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STEP 7. WHAT TO CONSIDER: potential models.
ANSWER: RIOS; InVEST; SWAT.
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STEP 8. WHAT TO CONSIDER: study design.
ANSWER: The first step in the modelling workflow is the use of a high-resolution spatial prioritization tool to allocate the type and location of conservation investments in the different sub-basins, subject to budget constraints and stakeholder concerns (Resource Investment Optimization System – RIOS; Vogl et al., 2015). We then applied the Soil and Water Assessment Tool (SWAT; Arnold et al., 1998) using the RIOS-identified investment scenarios to simulate spatially explicit changes in water yield and suspended sediment at different levels of investment. Finally, in consultation with downstream water users (urban water supply and hydropower) we link those biophysical outputs to monetary metrics, including: reduced water treatment costs, increased hydropower production, and crop yield benefits for farmers in the conservation area. The analysis focused on the benefits that would arise from a USD 10M investment in these sub-watersheds disbursed over a period of 10 years.
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STEP 9. WHAT TO CONSIDER: other key parameters.
ANSWER: Utilized existing SWAT model (updated with new land cover and calibration data) and expertise from a third-party consultant to handle the hydrologic modeling. The RIOS model was chosen because it helps optimize the locations of activities to maximize the impacts that you can have with a limited budget, and streamlines the process of creating scenarios of activities for analysis. A major part of the scoping in this study was to determine the appropriate scope for the economic analysis - which benefits to include, what data were available to quantify those benefits, how far upstream/downstream to go with the economic benefits, and how to communicate other broad social benefits that are not quantifiable.
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STEP 10. WHAT TO CONSIDER: model(s) selected.
ANSWER: RIOS; SWAT; various economic analyses.
Nairobi WF Business Case
This study assesses the business case for the creation of the Upper Tana-Nairobi Water Fund to help protect and restore the quality and supply of water to one of Kenya’s most productive and economically important regions. The Upper Tana River basin covers approximately 17,000 km2 and is home to 5.3 million people. The water it provides is of critical importance to the Kenyan economy. It fuels one of the country’s most important agricultural areas, provides half of the country’s hydropower output, and supplies 95% of Nairobi’s water. It is also home to areas of unique biodiversity and iconic national parks.
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