The Kenya Tea Development Agency (KTDA) has refuted claims that over Sh1.03 billion from tea farmers in Kericho and Bomet was misused, insisting the funds were fully accounted for and spent within approved budgets.
In a statement released on Tuesday, KTDA described the allegations as “false and misleading,” clarifying that the money was invested in Settet Power Generation Company’s small hydroelectric projects aimed at providing reliable and affordable electricity to tea factories.
Settet Power Generation Company Limited was incorporated in October 2010 and is jointly owned by seven tea factories in Kericho and Bomet—Kapkatet, Litein, Tegat, Momul, Kapkoros, Mogogosiek, and Kapset—together with KTDA Power Company Limited.
Each shareholder holds a 12.5 per cent stake in the company, which was formed to develop small hydro plants that lower production costs and ultimately increase farmers’ earnings.
Currently, two key projects are under development: the Chemosit Small Hydro Plant with a capacity of 2.5 megawatts, and the Kipsonoi Small Hydro Plant at 2.6 megawatts. Both projects are financed on a 65:35 debt-to-equity ratio, requiring a total equity contribution of Sh1.1 billion. As of October 2025, shareholders have contributed Sh1.03 billion, all of which KTDA said “has been fully utilized within the two projects in line with approved budgets.”
Detailed expenditure records show Sh580.8 million paid to civil works contractors, Sh204.8 million to project consultants, Sh350.8 million for electromechanical equipment, and Sh71.4 million for land acquisition in Chemosit and Kipsonoi.
Overall, Sh1.208 billion has been spent, with a temporary financing gap of Sh174 million covered through internal borrowing. KTDA emphasized that “these funds have remained within the Settet Power projects and none has been diverted elsewhere.”
The agency cited external factors as reasons for project delays, including delayed debt closure by international financiers, challenges in land acquisition, and transmission wayleave overlaps with Kenya Power.
Despite these hurdles, progress has been significant. Chemosit, for example, secured Sh1.1 billion in debt financing from the IFC/Proparco/FMO syndicated facility in September 2024, following lengthy negotiations.
Civil works at Chemosit are now 49 per cent complete, with electromechanical installations at 78 per cent, and the contractor fully re-mobilized. Completion is targeted for May 2026. Meanwhile, Kipsonoi is advancing with land compensation and topographical surveys as lender discussions continue.
KTDA reassured farmers that all project finances remain under strict oversight.
“All project expenditures are subject to external audits and are regularly reported to respective Regional Power Company Boards, Factory Boards, and shareholders during annual general meetings,” the statement noted.
The agency reiterated its commitment to transparency, accountability, and prudent financial management, describing the Settet Power projects as farmer-owned investments aimed at achieving long-term energy self-sufficiency and operational efficiency for factories in the West of the Rift Valley.
KTDA also called on political leaders to avoid making statements that could mislead farmers or undermine community-led initiatives.
“We therefore urge all leaders to seek accurate information and verify facts before making public statements that may mislead farmers or undermine their own community-driven initiatives,” the statement read.
Once completed, the projects are expected to significantly reduce energy costs for tea factories in Kericho and Bomet, further strengthening the profitability and sustainability of tea farming in the region.