Water Sector Trust Fund (Water Fund) is the Kenyan State Corporation under the Ministry of Water, Sanitation and Irrigation mandated to assist in financing water, sanitation and water resources management projects in the underserved and marginalized rural and urban areas. In the Water Act, 2016, the mandate of the Water Fund is to provide conditional and unconditional grants to Counties and to assist in financing the development of and management of water services in the marginalized and underserved areas . The Water Fund has developed five main mechanisms of financing and executing its operations as follows:
a) Rural Investment; support towards implementation of water supply and sanitation projects in underserved rural communities. The programme is implemented through water utilities serving rural areas.
b) Urban Investment; support towards water supply and sanitation projects for low-income urban areas. This programme is implemented through the Water Services Providers (WSPs).
c) Water Resources Climate Change Investment; gives support to communities to effectively conserve their catchments, manage and protect the water resources within their sub-catchments. The programme is implemented through Water Resources Users Associations (WRUAs); Community Forest Associations (CFAs) and Conservancies, International NGOs (INGOs) and Community Based Organizations (CBOs). Technical support to the beneficiary communities is given by partner institutions eg Kenya Forest Service (KFS), Water Resources Authority (WRA) and Northern Rangelands Trust (NRT).
d) Results-Based Financing: support towards water and sanitation projects in urban low-income areas, financed through loans from Kenyan commercial banks, which are then subsidized by Water Fund on achievement of agreed targets. The programme is financed through Water Services Providers (WSPs)
e) Research and Innovation Financing: support towards financing of research and innovation initiatives within the sector. The outputs of these initiatives are geared towards generation of new knowledge in the sector, provision of innovative, practical and cost-effective solutions in the realization of sustainable provision of water, sanitation and sewerage services in addition to water resources management as well as addressing gaps through collaborations and adaption of innovative models for better service delivery.