The National Water Fund (NWF) was initially established under the Water Supply and Sanitation Act No. 12 of 2009 under the name of National Water Investment Fund with responsibility of providing investment support in water supply and sanitation projects and conservation of catchment areas serving water supply abstractions. The actual operationalization of the NWF commenced in the financial year 2015/2016.

Currently operations of the NWF are governed by the Water Supply and Sanitation Act No. 05 of 2019 which mandates the Fund to mobilize resources and provide investment support for water service provision and the management of catchment areas serving water supply abstractions. The Act and National Water Fund Regulations, GN. No. 981 of 2019 provides basis for NWF to issue funds for implementation of water projects. The Water Projects Funding Guidelines has been developed to provide more details especially on the criteria for selecting eligible water projects for financing.