Economics of ecosystem services of the Tana River basin in Kenya (2014-2015)

Assessment of the impact of large infrastructural interventions


Tana River is Kenya’s longest river and originates from two of Kenya’s major water towers: Mt. Kenya and the Aberdares. The Tana River Basin covers 22% of the country’s total land mass and is home to 18% of the country’s population. It contributes over 50% of Kenya’s river discharge to the Western Indian Ocean. Ecosystems in the Tana River Basin including forests, arid and semiarid lands, mountain vegetation, freshwaters and wetlands, marine and coastal areas and agro systems provide a range of ecosystem services vital for human wellbeing such as drinking water, hydro-electric power, fisheries, agriculture and biodiversity.

The river basin is facing a number of challenges potentially undermining the continuous provision of ecosystem services. The upper catchment is threatened as more land is allocated to farming while poor farming practices have also led to soil erosion and pollution of the rivers. Water resources are planned to be used for water supply to Nairobi and Lamu port/city and this is envisaged to lead to an over-abstraction of water in the Basin. A proposal for the expansion of irrigated agriculture and energy through additional dams has also raised concerns.

Tana River
Tana river

The study

Against this background, the Water Resources Management Authority-Tana Catchment Area (WRMA-TCA) with the support of UNEP and Wetlands International (representing the Ecosystem Alliance) and The Netherlands Ministry of Economic Affairs are working towards determination of the value of the ecosystem services of the Tana River basin and their economic significance to the Kenyan economy, with a view to providing evidence for development planning and water resources allocation, so as to safeguard its hydrological, ecological and socio-economic benefits. The main objective of this study is to assess the economic value of the positive and negative externalities of different water-flows regimes, both upstream and downstream in the Tana River basin. In order to achieve this objective, the multidisciplinary study includes the following specific sub-objectives:

  • Create baseline information on the state of ecosystems in the Tana Basin for planning, management and monitoring of ecosystems;
  • Undertake an assessment of the hydrological status of the Tana River Basin under different water and climate regimes;
  • Determine economic values of ecosystem services for use in decision making in development planning and water resources allocation in the Tana River Basin;
  • Design a stakeholders map revealing the level of influence of various entities in managing the Tana River Basin as well as the level of impact of various water and climate regimes;
  • Establish a basis for transparent choices and trade-offs for sustainable management of the Tana River Basin;
  • Increase awareness on the significance of ecosystems and ecosystems services of the Tana to the economy of the country and its growth.

Nairobi map
The flood of investment


The study clearly shows that current development plans in the Tana River Basin have positive but also serious negative effects for various stakeholder groups in the basin. The study helps to identify a number of critical areas that deserve further attention before the proposed development projects in the Tana River Basin are implemented. For example, the study shows that the negative downstream effects of the HGF dam often outweigh the positive effects of the dam upstream. This outcome does not imply that the HGF dam should not be developed, but instead calls for further investigations to what extent alternative dam management regimes could mitigate the negative effects of the HGF dam downstream. Although the study shows that several planned development projects fall short in terms of economic efficiency, it does not provide an immediate alternative for the basic economic services provided by these interventions, since this is beyond the scope of the current study. We think these questions are excellent topics for future research. The current study is an important first step towards a truly integrated analysis which aims at optimising water use within the Tana River Basin, taking into account the development goals of the Kenyan government, the limits to the hydrological system, as well as the capability of stakeholders to adapt to new conditions. For that ambitious goal, this study provides an excellent starting point.

Chart Tana basin
Three scenarios

Report:The Economics of Ecosystem Services of the Tana River Basin


Contact: For more information, please contact Pieter van Beukering ( or Frank van Weert (