1. 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

2. 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:  Kenya Electricity Generating Company (KenGen)  Irrigators (Kakuzi, Delmonte and Yatta canal farmers)  Nairobi City Water and Sewerage Company

3. 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.

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

5. Data collection Water userInterviews with water user representative Data received by research team Yatta (WACO and Min of Water) Yes KenGenYes Nairobi WaterYes DelmonteYesNo KakuziYesNo

6. 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 The Yatta Water and Sewerage Company (Yatta- WASCO) draws water from the Yatta furrow

7. Water flow in the Yatta canal 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

8. 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

9. Assumptions for Cost Benefit Analysis  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.

10. 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)

11. 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

12. Costs Benefits Results for YATTA Net benefits Ksh 25million Benefit cost ratio3.1 Net benefits discounted at 12% Ksh 170 million

13. Nairobi City Water Sewerage Company

14. Ndakaini Dam reservior

15. Annual costs of providing water

16. Potential of impacts of Green Water Credit on Nairobi CWSC.

17. 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