Cabinet Secretary for Agriculture and Livestock Development Mutahi Kagwe, appearing before parliamentary committee on Wednesday, December 3,2024 laid out conditions for leasing of state sugar corporations.
On May 10, 2025, four sugar companies, South Nyanza, Nzoia, Chemelil, and Muhoroni-were officially handed over to private players under a 30-year lease agreement.
Busia Sugar Industry Ltd took over South Nyanza, West Kenya Sugar Company Ltd leased Nzoia, Kibos Sugar & Allied Industries Ltd acquired Chemelil, while West Valley Sugar Company Ltd assumed control of Muhoroni.
CS Kagwe highlighted that the lease terms set rental fees at Kshs. 40,000 per hectare annually for Chemelil, Muhoroni, and Sony Sugar, and Kshs. 45,000 per hectare for Nzoia.
Additionally, concession fees were pegged at Kshs. 4,000 per tonne of sugar and Kshs. 3,000 per tonne of molasses produced.
CS Kagwe stated that a goodwill payment equivalent to one year’s lease rental was also required upfront.
“The lessee shall not assign, transfer, pledge or make other disposition of the lease or any part thereof,” stated CS Kagwe.
According to the CS, the agreements further require lessees to invest in cane development, modernize mills, upgrade machinery, and adopt new technologies to boost efficiency.
They are also mandated to diversify into cogeneration of power, bioethanol production, and allied products.
At the end of the lease, all investments will revert to the government.
“The nucleus land shall only be used for cane development and not be used as collateral by the lessee,” CS Kagwe clarified.
CS Kagwe stressed that lease proceeds will directly benefit local communities through bonuses paid to farmers.
He finally confirmed that while land, buildings, plants, and machinery were leased, motor vehicles and livestock were exempted.
