Private operators taking over the four State-owned sugar mills will pay annual rent of up to KSh 45,000 per hectare and concession fees tied to sugar and molasses production under new 30-year lease agreements, Agriculture Cabinet Secretary Sen. Mutahi Kagwe has told Parliament.
- •Under the terms, the investors will pay KSh 40,000 per hectare for Chemelil, Muhoroni and Sony, and KSh 45,000 per hectare for Nzoia.
- •They will also remit KSh 4,000 for every tonne of sugar produced, KSh 3,000 per tonne of molasses, and a one-off goodwill payment in the first year.
- •The fees will form part of the Government’s revenue pool for farmer support, cane development and infrastructure upgrades.
The mills, Sony, Nzoia, Chemelil and Muhoroni, were leased to Busia Sugar Industry Ltd, West Kenya Sugar Company Ltd, Kibos Sugar & Allied Industries Ltd and West Valley Sugar Company Ltd respectively on 10th May 2025 as part of a long-delayed plan to revive the troubled sector.
Kagwe says that all initial and future investments made by the private millers, including factory upgrades, cane development spending, new technologies and diversification into cogeneration and bioethanol, will revert to the Government once the 30-year term lapses.
The lease comes as the four factories grapple with debts owed to farmers and employees running into billions. Despite clearing KSh 1.7 billion in cane delivery arrears last year, the mills had accumulated an additional KSh 500 million, which Treasury began settling in July.
