was only able to meet about 70% of demand and even that is with intermittent supply (NCWSC, 2017).<sup>10</sup> Like in many developing countries, sanitation coverage is significantly lower than water access, with approximately 18% of Kenya’s urban residents having a sewerconnected facility (Kenya National Bureau of Statistics et al., 2015).

# **3.1 Expansion into Informal Settlements**

Nairobi’s water services board, Athi Water Works Development Agency, expanded water and sanitation trunk lines into many of Nairobi’s informal settlements between 2012 and 2016. After the trunk infrastructure was in place, Nairobi’s water and sanitation utility could offer compound-level connections to the piped system. Property owners were able to connect their compounds to the trunk lines by signing a contract agreeing to be responsible for paying water and sanitation consumption and loan charges, and to service disconnection in the event of nonpayment. The utility offered each property owner a comprehensive infrastructure upgrading package including (i) upgrading of existing latrines to be connection-ready including filling pit latrines and building superstructures where needed; (ii) a single piped water connection to the compound; (iii) a wash basin; (iv) a 400-liter water storage tank for when supply was temporarily unavailable; and (v) the physical connection of the latrine(s) to the newly built sewerage line.<sup>11</sup> – The unsubsidized cost of this full package was approximately US$ 1,100 twice the average monthly income of property owners in the target areas. The World Bank provided grant financing to reduce the connection costs by 69%, and the utility took commercial loans to finance loans from the utility to property owners for the rest. Property owners paid off the loans in monthly installments of US$ 6 (US$ 4.50 for sewer and US$ 1.50 for water) added to the monthly service use bills.<sup>12</sup> This was offered to property owners on a voluntary opt-in basis, if they agreed to the terms of the contract and paid a US$ 16 upfront – deposit. Since these monthly loan installments were highly affordable representing 1.1% – of property owner income on average over 90% of property owners agreed to participate.<sup>13</sup> This resulted in an estimated 137,000 people living in Nairobi’s informal settlements gaining

> 10While significant investments to expand water supply to the city are underway, rationing is expected to continue. This limited supply is exacerbated by cartels that damage utility infrastructure and control water supply in some parts of the city. Cartels were not active in the specific study areas during the time of the research (World Bank, 2019).

> 11The water connection program started prior to the sanitation expansion. Compounds started receiving water connections from 2014, but only started receiving sanitation connections from 2016. Investment in the water connection was a prerequisite for sanitation upgrading.

> 12We use an exchange rate of 1 USD = 100 KES throughout.

> 13These loan installment payments were lower than the drudging cost of pit latrines, about US$ 8.00 per month, that many residents used prior to trunk line services.

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