How we Work
KIFFWA pursues an innovative way of deploying development funds and commercial capital to water initiatives in Kenya.
This is realized by providing early-stage capital and expertise to (lead) developers of water initiatives. In that way KIFFWA acts as a co-developer of a given initiative and ‘de-risks’ the lead developer of that initiative during the development phase; typically the most risky phase of any initiative.
Initiatives are identified at idea/concept stage. The overall criteria for an initiative to become part of the intake procedure include having or promoting:
- Positive Environmental Impact
- Positive Social Impact
- Financial Viability
- Technology Transfer
- Strong Lead Developer
- Sound Governance
Furthermore, initiatives should be bankable and of scale (with a size of at least EUR 2 million in total project costs). The lead developer should be a reputable person or entity with a strong track record of project development and/or management and to have invested or demonstrate skin in the project.
Intake & Investment Process
Because KIFFWA intervenes in the most risky phase of project development, it employs an intake procedure (see the different steps below), starting with the orientational phase or quick scan until the signing of a Joint Development Agreement (JDA).
Generally, the KIFFWA intake and investment process can be summarised as follows:
The Quick Scan is a short introduction made by the project proponent on his initiative to allow KIFFWA’s management team to decide whether next steps are opportune.
If the Quick Scan and follow up discussions with the project proponent are positive, KIFFWA and the project proponent enter into an MOU. The MOU sets out the working relationship with the proponent, provides for exclusivity and division of tasks and responsibilities.
This is a detailed description of the technical, legal, financial, governance, and environmental aspects of the initiative. Its objective is to provide a full and accurate description of the initiative / project and provide a basis for the Investment Committee to decide whether or not the proposed project / initiative meets the KIFFWA investment criteria and if KIFFWA should invest in it.
The Joint Development Agreement is the contractual agreement between KIFFWA and the Lead Developer / Project Proponent. It sets out the roles and responsibilities of the parties / joint developers, the estimated budget, the anticipated project milestones and the exit and recoup mechanisms of KIFFWA. The JDA will generally provide for setting up of a special purpose vehicle owned by KIFFWA and the project proponent to undertake the project.
Repayment conditions are negotiated between the lead developer and KIFFWA. KIFFWA’s primary instrument is a ‘convertible grant’. When financial close is reached (i.e. when all financing and project agreements have been arranged and signed), the capital (grant) provided by KIFFWA will be converted into a:
- One-off fee
- Equity stake
- Mezzanine (hybrid of debt and equity)
Ethics and Compliance
KIFFWA sets great store by having integrity as one of its core values. To optimize transparency and realize fair business practices, KIFFWA is committed to fight corruption, maintain the proper code of professional ethics and to protect the organisation from various associated risks.
Thorough integrity checks and procedures are therefore integrated in all of KIFFWA’s activities and relations with business partners. Should any party, nonetheless, want to raise a question or concern on matters involving non-compliance or unethical/fraudulent behavior; one can report this by sending an email to: email@example.com.
An independent Ethics and Compliance Officer (ECO) will review the case and confirm to the reporter within three business days after the email has been received. If wished for, the ECO will ensure that the reporter remains anonymous.
KIFFWA – Involvement in the Project Life Cycle
|KIFFWA – INVESTMENT CRITERIA|
|Stage of Intervention||Early Stage|
|Investment Amount||50% of the Project Development Budget, up to a maximum of EUR 500,000|
|Total Project Size||Minimum Project Size – EUR 2 Mn
Preferred Project Size – EUR 10 Mn to EUR 20 Mn
|Selection Criteria||Project must:
|Exit Mechanisms at Financial Close||One-off payment with premium
Equity into the project
Loan into the project
Hybrid of the above instruments
|Sector Focus||One-off payment with premium|
|Current Geographical Focus||Kenya|
What we fund / support
- Obtention of permits, licenses and other approvals
- Securing of Easements / Wayleaves
- Completion and Update of Technical Studies
- Procurement of EPC and O&M Contractors
- Financial Advisory Services including Transaction Advisory and Fund Raising
- Legal Advisory Services
- Capital Expenditure*
- Execution of Commercial Agreements
- Project Management Costs
Submit Your Initiative