Quick answer
The Water Sector Trust Fund (WaterFund) is a state corporation set up under section 113 of the Water Act, 2016. Its object is to give conditional and unconditional grants to counties and to help finance water services in marginalised and underserved areas. Its Board of Trustees manages and mobilises resources, sets financing rules, prioritises underserved areas, monitors projects and publishes project information.
Updated 18 October 2026
The Water Sector Trust Fund, which brands itself as the WaterFund, is a state corporation under the Ministry of Water, Sanitation and Irrigation. Section 113 of the Water Act, 2016 sets it up as a water sector financing institution. Its job is to pay for water, sanitation and water resource projects in places that commercial water companies do not serve well: poor urban settlements, rural areas that are not commercially viable, and marginalised regions.
This guide lists the Fund’s legal objects and the functions of its Board of Trustees, taken from the Water Act (Cap. 372) as published by Kenya Law, current to 10 July 2026, and from the Fund’s own brief.
In this guide
Background
The WaterFund was first created under the Water Act, 2002 as the Water Services Trust Fund, with a mandate to finance water and sanitation for underserved low-income rural and urban areas. The Water Act, 2016 replaced it with the Water Sector Trust Fund and widened its role to include water resources management and grants to counties. It is a body corporate, so it can sue and be sued and hold property in its own name.
Objects of the Fund (Section 114)
The Act says the object of the Fund is to provide conditional and unconditional grants to counties, in addition to the Equalisation Fund, and to help finance the development and management of water services in marginalised areas, or any area the Board considers underserved. This includes:
- Community-level initiatives for the sustainable management of water resources.
- Development of water services in rural areas that are not commercially viable for licensed water service providers.
- Development of water services in underserved poor urban areas.
- Research into water resources management, water services, sewerage and sanitation.
Functions of the Board of Trustees (Section 116)
The Fund is run by a Board of Trustees made up of a chairperson and six other members, appointed under a trust deed drawn by the Cabinet Secretary (section 115). Under section 116, the Board’s powers and functions are to:
- Manage the resources of the Fund.
- Mobilise additional resources for the Fund.
- Formulate and implement principles, regulations and procedures for financing projects, in consultation with the national and county governments.
- Ensure the resources are shared efficiently and fairly, giving priority to rural and urban areas where access to basic water services is below the national average, and to rural areas vulnerable to the degradation or depletion of water resources.
- Monitor the implementation of projects.
- Maintain and publish information on the projects financed and their impact.
- Receive grants for onward lending to water service providers, counties and registered community schemes for projects serving underserved areas and the urban poor. This lending only applies to borrowers who can repay, and any profit must go back into water services for the underserved.
- Set up and manage subsidiary funds for sustainable financing of water services and water resources management.
- Develop incentive programmes for water resources management, including disaster management and climate change adaptation and mitigation, together with other institutions.
The Board must also gazette, after public consultation, the criteria for who qualifies for funding, taking equity into account.
Where the Fund’s Money Comes From (Section 117)
- Money appropriated by Parliament from the national budget.
- Money from the Equalisation Fund on agreed programmes.
- Money from county governments on agreed programmes.
- Donations, grants and bequests.
- A levy on consumers of piped water from licensed providers, if the Cabinet Secretary prescribes one by regulation after public consultation.
- Any other money payable to the Fund under an Act.
The Fund has a Chief Executive Officer appointed by the Board (section 118).
How the WaterFund Finances Projects
The Fund’s brief describes five financing windows:
- Rural investment: water supply and sanitation projects in underserved rural communities, carried out through utilities serving rural areas.
- Urban investment: water and sanitation projects for low-income urban areas, carried out through water service providers.
- Water resources and climate change investment: support for communities to conserve catchments, through Water Resources Users Associations, Community Forest Associations and conservancies, with technical help from bodies such as the Kenya Forest Service and the Water Resources Authority.
- Results-based financing: commercial bank loans to water service providers for low-income urban projects, which the Fund subsidises once agreed targets are met.
- Research and innovation financing: funding for research and practical innovations in water, sanitation and water resources management.
Bank financing for water is growing too. See our report on Co-op Bank’s water finance work and the sector’s funding gap. Residents dealing with Nairobi water bills can use our Nairobi Water help page.
How Communities and Counties Can Access Funding
Funding goes through institutions rather than individuals: county governments, water service providers, Water Resources Users Associations and registered community schemes. Calls for proposals and qualification criteria are published by the Fund. Contact the WaterFund on +254 20 2720696 or info@waterfund.go.ke. Professionals interested in working in the water sector can watch for openings on Job in Kenya.
Frequently asked questions
Which law establishes the Water Sector Trust Fund?
Section 113 of the Water Act, 2016 (now Cap. 372).
What is the main function of the Water Sector Trust Fund?
To give grants to counties and help finance water services in marginalised and underserved areas.
Who runs the Fund?
A Board of Trustees of a chairperson and six members, with a Chief Executive Officer appointed by the Board.
Can individuals apply for WaterFund money?
No. Funding goes to counties, water service providers, water resource user associations and registered community schemes.
What was the Fund called before 2016?
The Water Services Trust Fund, created under the Water Act, 2002.
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