Green Water Credit: Cost Benefit
Analysis of Soil and Water
Conservation Practices in the Upper
Tana Catchment
Cost Benefit Analysis
Esther Njuguna, Davies Onduru, Fred Muchena

 The small-scale land users in the Tana catchment’s basin are the potential suppliers of water.
 There are big waters users down stream of the Tana basin who are potential private funders of green water credits conservation activities. They include:



Kenya Electricity Generating Company (KenGen)
Irrigators (Kakuzi, Delmonte and Yatta canal farmers)
Nairobi City Water and Sewerage Company

In consultation with the main water users, the objectives of the off site cost benefit study were to:
 Conduct an off site economic evaluation of hydrological benefits of green water measures as identified in various
Green Water Credits reports
 Estimate the avoidable costs that green water management could save the government of Kenya in disastrous dry and wet years (El Nino and El Nina effects) in terms of flooding reduction, reduction of productivity losses, enhancing food security, scope for carbon credits etc.

 Literature review and development of data collection tools
 Discussions with large water users

Data collection

Data entry and analysis; and

Report preparation.

Water user
Yatta (WACO and
Min of Water)
KenGen
Nairobi Water
Interviews with water user representative
Yes
Yes
Yes
Delmonte
Kakuzi
Yes
Yes
Data received by research team
Yes
Yes
Yes
No
No


Yatta district is in the Eastern Province of Kenya

Irrigation potential in Yatta district is estimated at
4,450 hectares but only 1,000 hectares have been exploited (water shortage), supporting approximately 1000 households
 The Yatta Water and Sewerage Company (Yatta-
WASCO) draws water from the Yatta furrow

 The Yatta furrow is 60km long

During a very wet rainy season, the Yatta furrow has water flowing through the 60 km of its length
 During a dry year, only about 26-28km of the canal has water flowing

Potential impact of Green Water Credit on the Yatta canal
 GWC 4 “Increase ground water recharge from cropland by 4-57% (16-160mm per year) a potential annual gain of accessible water of 160-
1600m3 per ha”

higher flows into the Yatta canal extending water availability to the 60km mark and for longer periods of the year; flow rate higher than 1.1m3 per sec


The total number of hectares under irrigation in the area

The number of domestic consumers (317 to 717) and irrigators (600 to 1000) that would be served by Yatta
WASCO

The savings Yatta WASCO would make from avoided
tankering costs for emergency water supply to institutions
(e.g. the hospital) and other consumers

The savings Yatta WASCO would make from de-silting activities of the Yatta canal.

Benefits of the Green Water Credit to the
Yatta community
-
 A: Total revenue gains to Yatta community 37 Million Ksh
Reduction in costs by Yatta WASCO of emergency water supply to institutions during drought
-
Revenue to Yatta WASCO from higher numbers of irrigators
-
Revenue to Yatta WASCO from higher numbers of water users provided with piped water
-
Higher benefits to Yatta small scale irrigators from farms under irrigation (based on gross margins for sukuma wiki; could be higher if high value vegetables are irrigated and marketed)

Benefits of the Green Water Credit to the
Yatta community
 B: Total costs increase for the Yatta community
12 million Ksh

Change in costs of water treatment (assumed to increase to level of flooding)

Change in costs of de-silting the canal

Net benefits Ksh 25million
Benefit cost ratio 3.1
Net benefits discounted at
12%
Ksh 170 million

Nairobi City Water Sewerage Company
Figure 1: The population of Nairobi City from 1906 to 2009
Population In Nairobi Expon. (Population In Nairobi)
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0 y = 8.9208e
R
2
0.2841x
= 0.993
1906 1911 1921 1926 1929 1931 1939 1944 1948 1955 1957 1960 1962 1965 1969 1979 1989 1995 1999 2005 2009
Year

80,000.00
70,000.00
60,000.00
50,000.00
40,000.00
30,000.00
20,000.00
10,000.00
-
Fig 2: Water level in Million Cubic Meters at Ndakaini Dam from 1997 to 2001
Year

Annual budget costs for NCWSC
(Ksh)
Costs of Water treatment chemicals
Costs of water and conservancy
Costs of licensing, lease and levy
Percentage of water treatment costs to total costs
Year 2009 Year 2010 Annual costs with GWC-1
Annual costs with GWC-2
1,428,535,299 1,291,905,174 1,360,220,236 1,315,254,026 1,288,049,621
158,196,028 203,780,440 180,988,234 136,022,023 108,817,618
5,658,450 266,333
Average annual budget
2,962,391 2,962,391 2,962,391
520,571,124 526,227,562 523,399,343 523,399,343 523,399,343
13.31 10.34 8.45

Potential of impacts of Green Water Credit on
Nairobi CWSC.
Cost of providing water for one resident in the city of Nairobi
Cost of treating water for one resident in Nairobi
Ksh. per resident without GWC
433
Ksh. Per resident with GWC - 1
419
Ksh. per resident with GWC – 2
410
58 43 35
NPV in Ksh
Net benefits discounted at 12% 398,903,604
NPV in USD (100 to
USD)
3,989,036.04

Soil and Water Management can benefit the off site users like Nairobi Water Company and the small scale irrigators
Proposed: Offsite beneficiaries to compensate the smallholders to conserve the catchments