Figure 6.1 UEP Development Framework Schedule

6.4 Scheduling

Section 5 sets out a scheduling plan for each respective Focus Area, reflecting the key interactions between different projects. The synergies for each Focus Area are also described in relation to the whole Development Framework. Figure 6.1 below demonstrates the full set of proposed VC and infrastructure projects, showing where implementation would suitably begin.

Figure 6.1 UEP Development Framework Schedule

Value Chain Group Immediate

Focus Area 1:

Sagana Green Industrial Hub

Short term Medium term

(1) Sagana Green Industrial Hub

(2) Water, Wastewater and Drainage Provision for Phase 1 Sagana (3) Organic Waste Processing for Phase 1 Sagana

(4) Energy Solutions for Phase 1 Sagana (5) Access Road to Phase 1 Sagana

Long term

(6) Railway Station Upgrade

Focus Area 2: Kutus

Focus Area 3:

Kerugoya (7) Kutus Pilot Area Urban Regeneration (8) Kutus Urban Park and Community Centre (9) Improved Access to Kutus Markets

(10) Kerugoya Central Square

(11) Kerugoya Bus Park Improvements

KKM and KC Level Proposals (12) Kerugoya and Kutus Water Supply

(13) Kerugoya and Kutus Sanitation Provision (14) Micro-Hydro Projects

(18) Waste Collection (15) Solar Refrigeration (Cold Stores) (16) Solar Irrigation (17) Street lighting

(23) Donkey Management (19) Landfills (20) Catchment Management in Mt Kenya (21) Critical Rural Feeder Roads (22) NMT and Urban Street Improvements

Source: Atkins

6.5 Funding including Climate Funds

The investment experts, as part of the SUED programme, will develop feasibility studies for the proposed projects which will include estimated capital expenditure and operating expenditure requirements. It will likely be necessary to blend and combine a range of different sources of financial and non-financial support to meet the projects’ expenditure requirements. Careful consideration will have to be given to the differing eligibility criteria of the various sources in order to successfully structure blended finance arrangements.

Grant funding can help improve the financial viability of projects which have significant, upfront capital expenditures, improving the overall investment appeal of a project and attracting additional private investment as a result. The proportion of grant finance of the total project finance amount should be carefully justified, as simply seeking a maximised grant finance proportion can seed doubts in the private sector about the long-term financial sustainability of the project. Grant funding is also available to less commercially-viable projects with significant socio-economic or environmental benefits, particularly relating to climate change and resilience. They may also be focused on certain activities such as technical assistance in project preparation or capacity development.

Philanthropic and NGO grant funding could also be leveraged through initiatives such as businesses dedicating 1% of profits to corporate social responsibility (CSR) initiatives. Examples of projects could include tree planting, provision of or access to recreational facilities such as green spaces and SuDS development also aligned with the GBI approach. The World Bank’s Kenya Urban Support Programme (KUSP) has also been identified as a source of potential funding support for some of the UEP projects, including public realm improvements and urban drainage solutions. Private sector finance for a range of sectors is available in East Africa from both local and international sources. Existing investors in the region include impact investors, venture capitalists and private equity funds who are able to provide relevant instruments for the value chain projects such as equity, quasi-equity (mezzanine finance) or concessionary debt. Access to private finance will be contingent on the concrete demonstration of viable business models and strong governance structures.

Projects will also benefit by blending in non-financial support in the form of social capital, such as volunteer efforts from the community. Actions to build social capital include mobilising community organisations and volunteers to be involved with the development and implementation of projects. The most successful mobilisation of human and social capital resources occurs for projects where there is a demonstrated, direct and visible relationship between the project and the future benefits for community and volunteer stakeholders. Examples of projects could include raising awareness campaigns for more efficient use of water and solid waste collection and management. Green Blue Infrastructure funding

In order to successfully implement the GBD approach in KKM, there is a need to identify potential funding mechanisms and delivery pathways. Due to its aforementioned environmental and socio-economic advantages, GBD has the potential to introduce new funding prospects from both public (via grants and subsidies) and private sources116. There is a growing appetite among the investment community to identify investments that have sustainability at their core. In addition to traditional climate funds, such as the Green Climate Fund, there is a growing number of opportunities to access funding targeted at both climate resilience, and natural capital. In this regard, the GBI projects are well placed to attract investment and will be able to clearly demonstrate climate resilience benefits.

Innovation in the green finance sector could offer opportunities for potential funding mechanisms for KKM. In recent years, development partners and governments have established several new initiatives to promote the use of GBD worldwide, including the UN World Water Assessment Programme and the European Natural Capital Facility117. Identification of such sources of green finance for multi-benefit projects currently represents a key enabler for innovation in the application of GBI, particularly for KKM. The GBI Development Framework in Chapter 6 explores potential funding sources and delivery mechanisms for the implementation of each GBI project in more detail.

Mobilising the scale of resources to address the identified climate change adaptation measures to be implemented, and ensure that the selected VC and infrastructure projects are climate-resilient and inclusive, the Counties need to consider the full spectrum of potential funding sources available.

116. Browder, G., Ozment, S., Rehberger Bescos, I., Gartner, T. and Lange, G.M. (2019) Integrating Green and Gray: Creating Next Generation Infrastructure. Washington, DC: World Bank and World Resources Institute 117. Brown, K. and Mijic, A. (2019) ‘Integrating Green and Spaces into our Cities: Making it Happen’, Grantham Institute Briefing Paper, 30, Imperial College