Kenya: Agriculture Cabinet Secretary Mutahi Kagwe has assured Parliament that all assets and investments made by private operators in Kenya’s four leased public sugar mills will revert to the government once the 30-year concession period ends, reports Food Business Middle East & Africa.
Speaking in the National Assembly, Kagwe said the long-term leases signed in May were designed to bring in private investment while ensuring that ownership of the mills remains fully public.
The South Nyanza (Sony), Nzoia, Chemelil, and Muhoroni mills were leased 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, operators will pay annual lease rent of KES 40,000 per hectare for Chemelil, Muhoroni, and Sony, and KES 45,000 per hectare for Nzoia. They will also pay a concession fee of KES 4,000 per tonne of sugar produced and KES 3,000 per tonne of molasses, along with a one-time goodwill payment equal to one year’s lease rent.
The leases cover land, buildings, machinery, and nucleus estates as one operational unit, with no separate valuation for land or standing cane.
Kagwe said the lessees are required to rehabilitate factories, support cane development, upgrade technology, and diversify into cogeneration, bioethanol, and other value-added activities.
He also noted that no single company now controls more than half of the country’s sugar production capacity, and that the Sugar Act 2024 and the Competition Act provide regulators with the authority to prevent market dominance.
According to Kagwe, revenues from the leases will benefit farmers and nearby communities through improved bonuses, strengthened cane development, better infrastructure, and stronger out-grower programmes.
On the long-running Miwani Sugar Company land dispute, Kagwe informed MPs that the Cabinet has instructed his ministry and the Attorney General to pursue an out-of-court settlement with Crossley Holdings Limited due to conflicting court rulings over the land.
Kagwe said the leasing model represents a major shift for Kenya’s sugar sector, bringing together private sector efficiency and continued state ownership to support long-term food security and farmer welfare.
