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6.2. Implementation costs and potential funding sources
role out of supporting climate resilient infrastructure and their associated costs.
Horizontal governance recommendations The following are likely to support the effective implementation of the UEP: › Involvement of stakeholders in steering committees & working groups: Kathwana
Municipal Board and a continued
PSG should involve a broad range of stakeholders throughout the lifecycle of any SUED VC and infrastructure projects, sharing information and monitoring progress on intended outcomes for different stakeholders. › Thematic working groups: Kathwana
Municipality should establish project teams drawn from representatives from government and community stakeholders to develop particular actions and track implementation.
These working groups and project teams would usefully report back to Kathwana
Municipality on a quarterly basis. These groups could be formed around the key sectors and urban elements, such as: markets and trade, Municipality services including the waste system, sustainable transport, land use and planning permissions. › A mapping exercise should also be undertaken to identify the existing relationships and partnerships that exist at both Municipality and County level. Existing relationships with multilateral institutions, bilateral institutions, NGOs and think tanks can all be leveraged to support SUED projects. The mapping exercise will also be conducive to building greater coordination between the existing partnerships as well as identification of opportunities for partnerships with new and emerging entities. Some potential partnerships are set out below.
Synergies with other development programmes National government, IFIs, multilateral institutions and NGOs have ongoing programmes within Tharaka Nithi County which will provide synergy with the SUED programme and potential for partnerships. For instance, a number of irrigations schemes have been established in Tharaka Nithi funded by the County government and National government with support from donors like the International Fund for Agriculture Development - IFAD. The World Bank’s Kenya Urban Support Programme (KUSP) could provide an important partnership, supporting proposed urban improvements. For the development of affordable housing, cooperation with the the GoK Affordable Housing Programme is envisioned which provides an opportunity to engage in the development of housing and supporting infrastructure. Value Chain partners The success of the milk and food processing VCs outlined in Section 4, depends on establishing close partnerships with suppliers of the required agricultural produce, food and milk. The produce collection aggregation model proposed in Sections 3 and 5 will support the VCs facilitating and formalising the relationship between value addition facilities and farmers. The produce collection model could either be managed entirely by a business to support sourcing of its raw materials or by an outsourced third-party agent supplying to manufacturers, retailers and markets. In Kenya, Twiga Foods is an example of a business that manages its aggregation. It has set up several collection centres across the country targeting small scale farmers and supplies to retailers and wholesalers in Nairobi city. The milk processing VC would further benefit from cooperating with existing dairy cooperatives, such as the Tharaka Goat Breeders Association.
It is equally important to establish lasting partnerships with local, regional and international distributers to ensure successful marketing of the products. The milk processing VC should work closely with a Kenyan distributer for delivering UHT milk into the local market and for the export market with a large European retailer that provides inputs on product development and packaging, as well as volume offtake and logistical support. For the food processing VC, Betta Grains of Nairobi could be a good distribution partner for the local and regional market as they have a good fit with the product range. For the development of mixed food products, a partnership with an experienced producer, such as Ingredion, would be beneficial. The company is experienced in processing similar products and established one of their 28 Idea Lab innovation centres in Nairobi in 2018 which could support the long-term development of the hub both in terms of local and international markets.
Sweet N’ Dry is a successful agri-processing business in Kathwana. As outlined in the sector action plan it is critical to build a partnership of support and collaboration with this business in order to strengthen Kathwana as a regional hub for food processing.
Table 6.1 summarises the implementation costs and delivery for the VC and climate resilient and inclusive infrastructure projects across the three Focus Areas. Each project is considered by its sub-components; delivery partners and funding sources; capital costs and key cost elements; expected benefits to be realised; and timescale. This brings together the project information set out in Section 5.
It is important to note that these costs do not include various costs items including land acquisition, design and planning (unless stated, where this could reflect 10-30% of the Capex costs). Inflation and optimism bias have not been included at this stage, where this would uplift the cost estimates. There will also be often sizeable operational expenditure which will need to be factored in.
At a Development Concept level, the project implementation is summarised as:
Table 6.1 - Implementation Costs
Total estimated CAPEX for the UEP Development Framework:
Focus Area 1 CAPEX: KES 9,899 million
VC CAPEX: KES 440 million
Focus Area 2 CAPEX: KES 547 million
Wider Municipality CAPEX: KES 734 million
In terms of the funding scale between private (/PPP), public and other sources, the following is provisionally estimated: Focus Area 1 CAPEX: 50% public sector led (County, CGoK, providers), 25% private and PPP, 25% donor funding
Focus Area 2 CAPEX: 27% public sector led, 58% private and PPP, 15% donor funding
VC CAPEX: Milkprocessing VC: PPP Food Processing Hub: donor funded and PPP
Whole CAPEX: 30% public sector led, 50% private and PPP, 20% donor In terms of the cost scale over time, the following breakdown is estimated given the individual project schedules: Immediate-term CAPEX: KES 184 million
Short-term CAPEX:
Medium to long-term CAPEX: KES 27,465 million
KES 767 million
Table 6.2 - Costing overview
Title Description & sub-components Delivery Partners & sources of funding
Focus Area 1: Eco-Industrial Park
VC: Milkprocessing Development of a Milkprocessing Plant for Cow and goat milk focused on long life products, including UHT milk and cheese Private Public Partnerships (PPP), Cooperatives (such as Tharaka Goat Breeders Association), regional and international distributor and retailer Cost in KES
For Milk processing, the total investment required is estimated at KES 180 to KES 200 million. Over one third the investment costs are for machinery and vehicles, with around 20% for buildings and site preparation, some 15% covers working capital and the remainder for training and marketing. › Estimated that the project will create 60 full-time employees in the first phase, with high potential for employing special interest groups (SIGs). › Environmental benefits include support to pastoral farmers, low levels of water usage and low levels of waste or pollutants produced. › Increase resilience of livestock farmers and contribute to poverty alleviation through reducing losses and providing access to a stable market for their produce. › Supporting for expansion in milk production › Reducing spoilage and improving product quality › Raising the potential for stock improvements through the link with the Livestock Improvement
Centre. › Supporting investment in fodder production, abattoir and tannery.
Expected benefits Timescale
Short-term to mid-term
Title Description & sub-components Delivery Partners & sources of funding Cost in KES Expected benefits Timescale
VC: FoodProcessing Hub A single hub for processing a range of fruit, vegetables and grains, combining common collection, processing, packaging, storage, finance and marketing to produce competitively priced food for consumers and industry. IFI/ Donor Finance, Private Public Partnership (PPP)
Existing processors such as Sweet n Dry, Local distribution partner, Technical and export partner The total investment required is estimated at KES 550 to KES 580 million. Around one third of this amount is for working capital, with a similar share for buildings and site development. The cost of the vehicle fleet accounts for 14% of capex, with machinery and equipment around 16%. Other capital costs cover initial training and marketing. › Creating up to 200 fulltime employees in the first phase, with high potential for employing special interest groups (SIGs) and people with disabilities (PWDs). › Reducing post-harvest losses; › Establishing a food processing hub that could be expanded in line with produce supplies and markets. › Supporting investment in irrigation and expansions in production in a wide range of crops, through stable offtake and prices. › Providing a range of shelf-stable foods, enhancing food security › Enhancing Kathwana as a market centre
Eco-Industrial Park › Masterplan to be developed for the Focus area 1:Eco-
Industrial Park › Network infrastructure (water,power, sanitation,ICT,
SuDS › Blue & Green Infrastructure Private Public Partnership › KES 8,122,000,000 inclusive of premises required for the proposed VC projects › Enhances the local economy and employment generation through the provision of modern manufacturing space,and mixed-use amenities › Opportunity for immediate investment and development -Contribute to a polycentric territorial development Short-term to mid-term
Short-term
Title Description & sub-components Delivery Partners & sources of funding Cost in KES Expected benefits Timescale
Waste: New Waste Management Site Construction of new engineered landfill cells IFI/ Donor Finance, Private Public Partnership (PPP) and/or private waste service provision
Support from NGOs, community groups. Employment and training by Kathwana Municipality or private entity/ CBOs. Maintenance responsibility of Municipality. Use of local SMEs for waste services KES 106,000,000 to KES 426,000,000 › Protection and improvement of natural resources (water, soil, forested areas and air) across the Municipality and consequently protection of public health › Employment generation potential including for youth, women › Revenue generation potential from waste stream use management including biogas generation (see below)
Waste: Solid Waste Upcycling Setting up new social enterprises/ engagement with existing ones
Plastic recycling unit
Plastic pelletiser
Plastic/carton shredder
Cardboard baler Initial IFI/ Donor Finance, Introduction of PPP and / or private service contracts into waste collection effort
Support from NGOs, community groups. Use of local SME’s for waste services KES 1,066,000 › Reduces the volume of material ending up as waste, reducing impacts on landfill › Increased formal employment in the waste sector through engagement with social enterprises › Potential to engage the local community and private sector and thereby raise public awareness on waste and recycling › Turns waste into a positive component of the town’s economy
KES 3,200,000
KES 190,000
KES 1,100,000
KES 350,000
Aluminium can shredder KES 1,300,000 Higher quality materials which can be sold to recycling brokers Short-term
Long-term, on-going
Title Description & sub-components Delivery Partners & sources of funding Cost in KES Expected benefits Timescale
Energy: Landfill biogas for cooking Detailed study of landfill to determine initial waste volumes and potential biogas outputs
Initial program design (incl. operation plan, financial modelling, customer service model)
Initial technical design
Social and environmental analysis
Development of implementation plan procurement (incl. procurement, deployment)
Detailed operation plan (incl. revenue collection, maintenance etc.) IFI/ Donor and/ or private finance
Partnering with Municipality to coordinate and plan activities
Partnering with local/ regional solution providers to determine appropriate technical and commercial solutions
Maintenance - capacity building programme to ensure continued operation of systems KES3,000,000 initial feasibility study
KES 25,000,000-50,000,000 initial start-up costs › Reduction in greenhouse gas emissions and deforestation › Revenue generation potential › Reduction in health incidents through improved indoor air quality by replacing wood/ charcoal/ kerosene › Requirement to ensure affordability for lower income groups
Energy: Utility scale renewable energy project Complete initial feasibility study and outline design
Development of procurement and deployment plan
Maintenance plan Private Finance
Partner with the ecoindustrial park developer to coordinate activities and develop the energy proposition Partnering with renewable energy technology specialists to determine procurement solutions Maintenance - capacity building programme to ensure continued operation of systems KES 15,000,000 to complete study/ design
KES 850,000,000 - 1,100,000,000 to complete installation › Reliable, resilient and green energy supply for the
Municipality › Employment generation potential › Revenue generation potential for the Municipality Mid-to Long term, dependent on establishment of new landfill relocation
Short-term
Title Description & sub-components Delivery Partners & sources of funding Cost in KES Expected benefits Timescale
Transport: New access roads upgrade: opening and upgrading of industrial access roads Upgrade of 1 km of road from earth to bitumen
Drainage facility provision C20 Funding
Partnering through Kenya National Government through the Kenya Rural Roads Authority (KeRRA) in Partnership with Tharaka Nithi County
Partnering with Tharaka Nithi County to provide the Safety and NMT facilities Capex of upgrading 3.9km of road KES 45,300,000 › Eased access to the Kathwana and industrial cluster, including for PWDs › Improved resilience against extreme weather events. › Improved land value › NMT facilities, walking and cycling mode, it will be providing an affordable, safe mode of transport for all workers and visitors
Transport: Product Collection Centres and supporting Infrastructures NMT facilities provision
Develop a collection centre fitted with sorting, storage, loading and unloading and parking facilities Funding
Partnering with Tharaka Nithi County for the delivery of the collection centres Partnering with Development Partners like DfID for delivery of collection centres Partnering with existing providers like Twiga Foods Limited Grading of feeder roads could be done by Tharaka Nithi County annual allocation Capex of the 2 Collection Centre KES 4,000,000
Annual Opex of the Collection Centre KES 400,000 › Reduced logistics costs of sourcing products from smallscale farmers with wider positive impact through stabilisation of prices, avoidance of losses due to inadequate storing, and improved access to information › Employment generation potential for youth, women and safeguarding livelihoods
Annual Opex of the bitumen road KES 4,500,000
Capex of the drainage KES 63,400,000 million
Annual Opex of drainage million KES 6,340,000
Capex of constructing sidewalks KES 45,300,000
Annual Opex of sidewalks KES 4,530,000 Immediate-term essential enabling infrastructure development
Immediate-term, essential enabling infrastructure development
Title Description & sub-components Delivery Partners & sources of funding Cost in KES Expected benefits Timescale
Energy: Solar refrigeration systems Mapping of ownership of all local livestock holdings and their product outputs, mapping of current distribution hubs and status of their product storage facilities IFI/ donor/ private finance (equipment, installation):
Partner with regional/county government to coordinate activities
Partner with local agri/ livestock organisations
Partnering with local solution specialists to determine appropriate deployment
Maintenance - capacity building programme to ensure continued operation of systems
Maintenance - responsibility of individual farmers KES11,250,000 based on max 15 systems
And KES 6,000,000 for two hubs › Reduced spoilage of agricultural produce leading to higher revenues for small farmers › Employment opportunities for women
Establishment of needs for solar refrigeration systems
Preparation of design brief for refrigeration systems
Development of procurement and deployment plan
Maintenance plan
Focus Area 2: Development Core
Sanitation: New Exhauster services, public toilets and capacity building on onsite sanitation systems construction and maintenance New exhauster service
New public toilets in the new market
Training on construction and maintenance of septic tanks and VIP latrines Public Sector Funding Kenya National Government through KeNHA and KURA in Partnership with Kisii County KES 22,022,000
KES 154,154,000
KES 3,146,000 Short-term
Improve safety in faecal sludge management
Increase access to sanitation services for all
› Raise awareness on safe sanitation processes among resident › Increase access to sanitation services for all Short-term, achievable in 2-5 years
Title Description & sub-components Delivery Partners & sources of funding Cost in KES Expected benefits Timescale
Energy: Streetlighting Review current implementation plan
Review current commercial and technical arrangements
Design a study to ensure suitable coverage of target area
Equipment review and selection
Development of a new commercial plan (procurement, deployment, implementation, maintenance) Public/ private finance
Partnering with Municipality to coordinate and plan activities
Partnering with equipment specialists to determine appropriate technology solutions
Maintenance capacity building programme to ensure continued operation of systems Estimated total based on part coverage to new areas, part reworking of existing areas actual:
KES 31,000,000 - 60,000,000 › Improved safety and security especially for vulnerable groups. › Longer operational hours at market, increased economic activity
Transport: Developing of a new bus park Design & development of bus terminus, with the incorporation of pedestrian facilities, drainage facilities, streetlighting, and vending spaces IFI / Donor finance (e.g. World bank)
Partnering with Tharaka Nithi County Government through the Kathwana Municipality
Partnering with Development Partners and IFIs Capex of constructing of the bus park KES 200,000,000 Annual Opex of the bus park KES 20,000,000 › Support future growth and public transport demand increase associated with increased levels of urbanisation › Increased footfall to support adjacent businesses and the local market. › Increase of sustainable transport options i.e. public transport › Increase revenue for
Municipality/county. › Facilitate accessibility of buses/ matatus for PWDs Short-term to complete coordination, Short-to Midterm to complete implementation
Short-term
Title Description & sub-components Delivery Partners & sources of funding Cost in KES Expected benefits Timescale
Transport: Developing of a new bus park Walkway & Cycling (NMT) provision on both sides along 2km of streets
Drainage facility provision
Traffic calming measures IFI / Donor finance e.g. World bank through the Kenya Urban Support Programme (KUSP)
Partnering with Tharaka Nithi County Government through Kathwana Municipality Capex of constructing of walkways and cycling lanes KES 45,000,000
Annual Opex of the NMT facilities KES 4,500,000
Capex of the drainag KES 63,000,000
Annual Opex of drainage million KES 6,300,000 › Increased safety and accessibility for pedestrians and
PWDs. › Improved liveability from green infrastructure i.e. reduced urban heat and increased air quality. › Improved livelihood for street vendors › Reduced congestion and air quality › Improved street quality for public transport use
Vending activities
Wider Municipality
Water: Improve flood and climate resilience of the water supply intake Improve flood and climate resilience of the water supply intake IFI / Donor finance and public funding
IFI/County governments/ NGOs and National government KES 26,741,000 Sustain water supply to Kathwana in a more reliable and consistent manner with resilience to climate change. Short-term
Short-term
Title Description & sub-components Delivery Partners & sources of funding Cost in KES Expected benefits Timescale
Water: Improve flood and climate resilience of the water supply intake 2500m3 Clear water tanks / storage at WTP
Expand distributions systems & Fire hydrants IFI/ Donor finance and public funding IFI/County governments/ NGOs and National government
Sanitation: Medium Term Sludge Handling Facility and Long-term centralised sewers system 750m3 elevated steel tanks for Municipality storage reserve
De-centralised sewage treatment facility
Long term sewerage system and wastewater treatment plant IFI /Donor finance and public funding IFI/County governments/ NGOs and National government KES 62,920,000 Sustain water supply to Kathwana in a more reliable and consistent manner with resilience to climate change
KES 565,463,008
KES 78,650,000
KES 55,055,000
KES 1,457,244,764 › Increase water supply access and coverage. › Improve disaster preparedness.
› Increase water supply access and coverage. › Improve disaster preparedness.
› Improve safety in faecal sludge management › Protecting soil and water quality and reducing health related risks
› Improve wastewater management in the county › Enable and support long term
Municipality growth plans › Protecting soil and water quality and reducing health related risks Long-term, 2 - 5 years
Immediate Short-term measures are achievablet immediately, but Long-term projects may take 2-5 years
Long-term
Title Description & sub-components Delivery Partners & sources of funding Cost in KES Expected benefits Timescale
Water: Irrigation and rainwater harvesting Irrigation to support potato farming and other crops linked the VC proposals
Viability study into rainwater harvesting and conservation agriculture KES 22,808,500 › Improve water conservation capability of residents › Increase in water conservation capacity in the catchments › Improve access to water supply among residents
IFI / Donor finance and public funding IFI/County governments/ NGOs and National government KES 240,699,000 › Improve water conservation capability of residents › Increase farmer output per unit of farm size
Energy: Solar irrigation systems Mapping of ownership of all local agricultural and livestock holdings and their irrigation needs, current status of their irrigation facilities
Review of abstraction volumes from each borehole to ensure sustainability of water resources
Establishment of needs for solar irrigation and borehole systems
Preparation of design brief for boreholes/ irrigation systems
Development of procurement and deployment plan Maintenance plan IFI / Donor/ private finance
Partner with regional/ county government to coordinate activities
Partner with local agri/ livestock organisations
Partnering with local equipment specialists to determine solutions.
Maintenance - capacity building programme to ensure continued operation of systems.
Maintenance - responsibility of individual farmers KES 225,000,000 based on max 3,000 systems Funding (eqpt, installation): › Consistent service provision for farmers with no powered irrigation › Lower costs for farmers where current system is based on diesel generators or grid › Improving the financial sustainability of agriculture could provide significant improvements to the livelihoods of the local agriculture community and an expanding sector could lead to increased employment opportunities across the community › Reduced carbon emissions associated with agricultural sector Measures such as capacity building are achievable immediately.
Long-term projects may take 2-5 years
Short-term
Title Description & sub-components Delivery Partners & sources of funding Cost in KES Expected benefits Timescale
Waste: Integrated Waste Collection System Upgraded waste collection system IFI/ Donor Finance, Introduction of PPP and/or private waste services into waste collection effort
Support from NGOs, community groups, waste pickers
Funding for PPE, collection carts, training and wages for the CBOs, etc
Maintenance responsibility of Municipal Government
Employ local SME’s for waste services KES 5,300,000 to KES 10,600,000 million › Protection and improvement of natural resources (water, soil, forested areas and air) across the Municipality and consequently protection of public health through source-segregation (residual, recyclables, organic) therefore reducing volume of waste to landfill and improved sanitation and reduced illegal dumping of waste › Employment generation potential including for youth, women › Higher quality materials which can be sold to recycling brokers › Revenue generating aspects: valuable waste streams to be segregated e.g. metals, plastic
Transport: Upgrading major roads to enhance Kathwana’s connection to east region and Kitui County Upgrade of 65km of road from earth to bitumen IFI / Donor Finance (e.g. World bank)
Partnering with the Kenya National Government through KeRRA and Tharaka Nithi County
Partnering with Tharaka Nithi County to deliver the Safety and NMT facilities on the corridor Capex of upgrading the road KES 2,900,000,000 Annual Opex of the bitumen road KES 296,000,000 Capex of the drainage KES 4,100,000,000 billion Annual Opex of drainage KES 412,000,000 Capex of constructing sidewalks KES 226,000,000 Annual Opex of sidewalks KES 22,600,000 › Eased access to the industries › Better and safer pedestrian access › Improved land valueStorm water drains provision (130km)
NMT facilities provision Short-term / on-going
Short-term
Title Description & sub-components Delivery Partners & sources of funding Cost in KES Expected benefits Timescale
Transport: Bridge Development: New bridge on Marimanti -Ciambyu road (C359) across River Tana and Safe Crossings on Tana River Development of a bridge with safe crossing provision C63 IFI / Donor Finance (e.g. World bank)
Partnering with Kenya National Government through KeRRA and Tharaka Nithi County Capex of constructing the bridge KES 250,000,000 Annual Opex of the bridge KES 25,000,000 › Eased access to regional markets like Kitui › Improved quality of life › Better and safer pedestrian access › Improved land value
Transport: Road Upgrade: Upgrading major roads to enhance Kathwana’s connection to West Region including Chuka and Nairobi - Meru Highway Development of a bridge with safe crossing provision C63 IFI / Donor Finance (e.g. World bank)
Partnering with National Government through KeRRA and County Government, Tharaka Nithi Capex of upgrading 85km road KES 3,900,000,000 Annual Opex of the bitumen road KES 385,000,000 Capex of the drainage KES 5,400,000,000 Annual Opex of drainage KES 539,000,000 Capex of constructing 10km of walkways KES 226,000,000 Annual Opex of sidewalks KES 22,000,000 › Eased access to the Kathwana and industrial cluster › Better and safer pedestrian access › Improved land value Short-term
Short-term
Table 6.3 - Timing Overview giving an overview of the sequencing of infrastructure proposals and VCs
Project
Eco-Industrial Park
Milk Processing Food Processing Hub Eco-Industrial Park
New Waste Management Site Solid Waste Upcycling Landfill biogas for cooking Utility scale renewable energy project New access roads upgrade: opening and upgrading of industrial access roads Product Collection Centres and supporting Infrastructures Solar refrigeration systems
Development Core Area
Affordable Housing New Exhauster services, public toilets and capacity building on onsite sanitation systems construction and maintenance Streetlighting Developing of a new bus park Incorporation of street features on key urban roads
Wider Municipality
Improve flood and climate resilience of the water supply intake Clear storage tank, water distribution improvement, Municipality water storage and fire hydrants Medium Term Sludge Handling Facility and Long-term centralised sewers system Solar irrigation systems Management: Integrated Waste Collection System Upgrading major roads to enhance Kathwana’s connection to east region and Kitui County Bridge Development: New bridge on Marimanti - Ciambyu road (C359) across River Tana and Safe Crossings on Tana River Road Upgrade: Upgrading major roads to enhance Kathwana’s connection to West Region including Chuka and Nairobi - Meru Highway Immediate Short-term Medium to Long-term
