A thirst crisis is looming over Kenya’s towns. A shocking report by the Parliamentary Budget Office (PBO) warns that over 70 semi-autonomous water service providers (WSPs) are technically insolvent and face imminent collapse. The firms are choking under a collective debt of Sh25 billion, unpaid electricity bills, and massive "non-revenue water" losses.

The report paints a grim picture of mismanagement and political interference. County governments, which own these firms, are accused of treating them as cash cows—collecting revenue while refusing to pay for electricity or maintenance. As a result, Kenya Power has begun disconnecting pumps in counties like Machakos and Vihiga, leaving residents with dry taps.

"We Are Bleeding Water and Money"

"For every 100 liters of water pumped, 48 liters are lost to leakages or theft," the PBO report states. "No business can survive with a 48% loss margin. Unless the national government steps in with a bailout and strict conditionalities, the water sector will collapse by June 2026."

• The Electricity Bill: The biggest creditor is Kenya Power. Water firms account for a significant chunk of the utility’s bad debt. A proposal to grant water firms a preferential electricity tariff has stalled at the Energy Ministry.
• Public Health Risk: The collapse of piped water systems forces residents to rely on unsafe boreholes and water truckers, significantly increasing the risk of cholera and typhoid outbreaks in urban slums.

The PBO has recommended that the National Treasury withhold equitable share funds from counties that fail to clear their water utility debts. It is a harsh prescription, but for a sector on its deathbed, it may be the only cure.