Transcript 111 KB - Green Water Credits

Green Water Credit: Cost Benefit
Analysis of Soil and Water
Conservation Practices in the Upper
Tana Catchment
Off Site Cost Benefit Analysis
Esther Njuguna, Davies Onduru, Fred Muchena
Introduction

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:
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Kenya Electricity Generating Company (KenGen)
Irrigators (Kakuzi, Delmonte and Yatta canal farmers)
Nairobi City Water and Sewerage Company
Objective
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.
Methodology

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Literature review and development of data
collection tools
Discussions with large water users
Data collection
Data entry and analysis; and
Report preparation.
Data collection
Water user
Yatta (WACO and
Min of Water)
Interviews with
water user
representative
Yes
Data received by
research team
Yes
KenGen
Yes
Yes
Nairobi Water
Yes
Yes
Delmonte
Yes
No
Kakuzi
Yes
No
Yatta case study

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
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The Yatta Water and Sewerage Company (YattaWASCO) draws water from the Yatta furrow
Water flow in the Yatta canal
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The Yatta furrow is 60km long
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During a very wet rainy season, the Yatta furrow
has water flowing through the 60 km of its length
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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 1601600m3 per ha”
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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
Assumptions for Cost Benefit Analysis
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The total number of hectares under irrigation in the area
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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
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The savings Yatta WASCO would make from de-silting
activities of the Yatta canal.
Benefits of the Green Water Credit to the
Yatta community
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A: Total revenue gains to Yatta community 37 Million Ksh
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Reduction in costs by Yatta WASCO of emergency water supply
to institutions during drought
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Revenue to Yatta WASCO from higher numbers of irrigators
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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
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B: Total costs increase for the Yatta community
12 million Ksh
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Change in costs of water treatment (assumed to increase to
level of flooding)
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Change in costs of de-silting the canal
Costs Benefits Results for YATTA
Net benefits
Ksh 25million
Benefit cost ratio
3.1
Net benefits discounted at Ksh 170 million
12%
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
3,000
y = 8.9208e0.2841x
2,500
R2 = 0.993
2,000
1,500
1,000
500
0
19
06
19
11
19
21
19
26
19
29
19
31
19
39
19
44
19
48
19
55
19
57
19
60
19
62
19
65
19
69
19
79
19
89
19
95
19
99
20
05
20
09
Human population in '000
3,500
Year
Ndakaini Dam reservior
Fig 2: Water level in Million Cubic Meters at Ndakaini Dam
from 1997 to 2001
80,000.00
70,000.00
50,000.00
40,000.00
30,000.00
20,000.00
10,000.00
Year
2011
2011
2010
2009
2009
2008
2008
2007
2006
2006
2005
2005
2004
2004
2003
2002
2002
2001
2001
2000
1999
1999
1998
1998
1997
1997
Water volume
60,000.00
Annual costs of providing water
Year 2009
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 2010
Average
annual
budget
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
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.
Ksh. per resident
without GWC
Ksh. Per resident
with GWC - 1
Ksh. per resident
with GWC – 2
433
419
410
58
43
35
Cost of providing water for one
resident in the city of Nairobi
Cost of treating water for one
resident in Nairobi
Net benefits discounted at 12%
NPV in Ksh
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