URBAN DEVELOPMENT II

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The Second Urban Project seeks to strengthen institutional capabilities of Government and municipal authorities in implementing and managing urban development. It provides for construction of physical infrastructure and community facilities to serve existing unserved squatter settlements, preparation of new housing areas with serviced plots, credit for house improvements and new house buildings, and employment opportunities. In Kenya's three largest cities Kisumu, Mombasa and Nairobi, more than 30,000 low-income households will benefit directly from the project. There are no special risks. However, the economic rate of return could be reduced from 16 to about 14 should overall market rental levels be substantially lower than expected. Other uncertainties relate to the long run effectiveness of measures for fiscal reform started under the project.