Fund sources and Uses

1.1 Sources of Funds
According to the Water Supply and Sanitation Act, the sources of funds of NWF include:

1. Such moneys as may be appropriated by Parliament for the purposes of the Fund
2. Moneys as may be received from donations, grants and bequest from whatever source
3. Other sources of moneys after consultation between Minister and Minister responsible for Finance; and 
4. Such other moneys as may, by or under any Act, be payable to the Fund.

1.2    Funding Windows
In accordance to the Water Supply and Sanitation Act, the NWF is required to support investment in water projects by way of grants or loans. 

1.3    Grants 
Eligible water projects to be financed by the Fund will be selected basing on the criteria underlined under these Guidelines.

1.4    Loans
NWF loans on favorable terms are available to water authorities and community organization for investments in water services provisions. The procedures and mechanisms of issuing of such loans shall be as prescribed in the loan application guidelines issued by the Minister.

2.0 Use of Funds 
According to the Water Supply and Sanitation Act and the National Water Fund Regulations, utilization of the funds shall be as follows:

1. Not less than eighty-eight percent (88%) of the moneys deposited in the Fund shall be used for capital investment expenditure of water projects;
2. Not more than ten percent (10%) of the moneys deposited in the Fund shall be used for water development related administrative and operational costs which includes project preparations, design, supervision, monitoring and evaluation, monitoring undertaken by Ministry and RUWASA by ratio of 60% and 40% respectively; and
3. not more than two percent (2%) of the moneys deposited in the Fund shall be used for operational costs of the Fund

3.0 Selection of Water Projects
This chapter elaborates types and selection criteria of water projects eligible to be funded by NWF. The term water project is defined under section 3 of the Water Supply and Sanitation Act to mean project for construction, expansion or rehabilitation of water supply and sanitation infrastructure as well as development, protection and conservation of water resources. 
In addition, regulation 5 of the NWF Regulations, 2019 highlights water projects to be implemented by monies from the Fund may include those from the following broad areas:-

1. Protection and conservation of water catchment areas;
2. Development of water storage, safety and security facilities; and
3. Construction, rehabilitation and expansion of water supply and sanitation infrastructure.

The eligible water projects shall come from the two key sector areas i.e. Water Supply and Sanitation (Construction, Expansion or Rehabilitation of Water Supply and Sanitation Infrastructure) and Water Resources Management (Catchment Management Projects - CMPs).

3.1 Water Supply and Sanitation Projects
For purposes of accessing funds from NWF, water supply and sanitation project means projects for construction, expansion or rehabilitation of water supply and sanitation infrastructure. Such projects may be implemented by IAs through either contractors or force account method.

3.2 Eligible Water Supply and Sanitation Projects
Water supply and sanitation projects to be financed by NWF, shall involve projects for construction, expansion or rehabilitation of water supply and sanitation infrastructure which are elaborated hereunder: -

(i)    Construction of Water Project means development of new water supply and sanitation infrastructure such as water source, in-take, transmission, water storage facilities or distribution network.

(ii)    Expansion of Water Project means up-scaling of existing water supply and sanitation infrastructure such as water source, in-take, transmission, water storage facilities or distribution network.

(iii)    Rehabilitation of Water Project means restoration or reconstruction of a water supply and sanitation infrastructure such as water source, in-take, transmission, water storage facilities or distribution network.