Kenya pushes sugar sector beyond sugar with focus on ethanol and power generation

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Kenya is accelerating efforts to transform its sugar industry into a broader energy and industrial platform, with the government promoting electricity generation and ethanol production to reduce fuel imports, strengthen energy security and improve returns across the sugar value chain.

Speaking during a visit to West Valley Sugar Company, an investment under the Kipchimchim Group, Cabinet Secretary for Agriculture and Livestock Development Sen. Mutahi Kagwe said the long-term growth of the sector depends on extracting greater value from sugarcane beyond conventional sugar production, Farmers Review Africa, reported.

He said sugar factories should be developed to utilise every component of sugarcane for producing sugar, electricity, ethanol and other industrial products, creating new opportunities for investment, employment and economic growth.

Kagwe highlighted West Valley Sugar Company as an example of the sector’s potential, noting that the mill currently generates five megawatts of electricity while utilising only about 30% of its available bagasse—the fibrous residue left after sugarcane processing.

According to the minister, the facility could increase electricity generation to as much as 15 megawatts if operating at full capacity, opening additional opportunities for Kenya’s renewable energy sector.

He called for quicker implementation of frameworks that would allow sugar factories to sell surplus electricity to the national grid, stating that cogeneration could create additional income streams for both mills and farmers while reducing dependence on imported energy.

Alongside power generation, the government is increasing its focus on ethanol production to lower the country’s fuel import costs.

Kagwe said support for ethanol blending programmes would continue, adding that expanding the use of domestically produced ethanol could reduce pressure from fluctuations in global fuel markets and help conserve foreign exchange reserves.

West Valley Sugar Company currently produces approximately 20,000 litres of ethanol per day, which the government described as an example of the future direction of Kenya’s sugar industry.

During the visit, the government also highlighted progress under ongoing sugar sector reforms. Kagwe said sugar production has increased by around 22% over the past year, attributing the growth to the leasing of state-owned sugar factories and stronger support measures for farmers.

He also assured workers that outstanding salary arrears inherited from financially distressed public sugar mills would be addressed under the sector revival programme.

The minister encouraged greater local participation in sugar-related investments, saying opportunities in sugar processing, ethanol production, electricity generation and value addition should not be left primarily to foreign investors.

Kagwe further clarified that elections for farmer representatives to the Kenya Sugar Board are governed by law and remain the responsibility of farmers, although legislative changes are being considered to address operational challenges.

He commended the Kipchimchim Group for demonstrating how local investment can support agricultural industrialisation. The group currently employs more than 7,000 people across businesses spanning sugar production, ethanol, power generation, retail and logistics.

Representatives attending the visit included Kipchimchim Group Chairman Alfred Soi, Managing Director Bernard Soi, K-Matt Supermarket CEO Brian Soi and Kenya Sugar Board representative Samuel Lagat.