Kenya assures Parliament of full reversion of sugar mill investments after 30-year leases
Government retains full ownership of factories and land while private operators pay rent, concession fees and revive production.
KENYA – Agriculture Cabinet Secretary Mutahi Kagwe has assured Parliament that every asset and investment made by private operators in Kenya’s four leased public sugar mills will automatically return to the government at the end of the 30-year concession period.
Addressing National Assembly, Kagwe described the long-term leases signed in May as a deliberate strategy to attract private capital while preserving permanent public ownership.
The mills: South Nyanza (Sony), Nzoia, Chemelil, and Muhoroni, were handed to Busia Sugar Industry Ltd, West Kenya Sugar Company Ltd, Kibos Sugar & Allied Industries Ltd, and West Valley Sugar Company Ltd respectively.
“These are not sell-offs but performance-based concessions aimed at reviving factories, expanding cane production, protecting farmers, and modernising the sector,” Kagwe told MPs.
Under the agreements, lessees will pay annual lease rent of Kes 40,000 (US$309.24) per hectare for Chemelil, Muhoroni, and Sony, and Kes 45,000 (US$347.89) per hectare for Nzoia.
They will also remit a concession fee of Kes 4,000 (US$30.92) per tonne of sugar produced and Kes 3,000 (US$23.19) per tonne of molasses, plus a one-off goodwill payment equal to one year’s lease rent.
The leases cover land, buildings, plant, machinery, and nucleus estates as a single operating ecosystem, with no separate valuation of land or standing cane.
Kagwe emphasised that operators are contractually bound to rehabilitate factories, invest in cane development, upgrade technology, and diversify into cogeneration, bioethanol, and other value-added products.
He confirmed that no single company now controls more than 50 percent of national sugar production capacity, and both the Sugar Act 2024 and Competition Act empower regulators to prevent market dominance.
Lease revenues, Kagwe added, will flow directly to farmers and surrounding communities through higher bonuses, cane development programmes, infrastructure upgrades, and strengthened out-grower schemes.
On the long-standing Miwani Sugar Company land dispute, the Cabinet Secretary disclosed that the Cabinet has directed his ministry and the Attorney General to seek an out-of-court settlement with Crossley Holdings Limited amid conflicting court rulings over the same parcel.
Kagwe reiterated that the leasing model marks a turning point for Kenya’s sugar industry, combining private sector efficiency with continued state ownership to ensure long-term food security and farmer welfare.
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