The Kenya Tea Development Agency (KTDA) has denied allegations that Ksh1.03 billion contributed by tea farmers from Kericho and Bomet counties was misappropriated or diverted to projects in other regions.
In a press release dated Tuesday, October 14, KTDA stated that the funds were fully accounted for and used exclusively for the development of two hydroelectric power projects under the Settet Power Generation Company.
“These claims are false, misleading, and disregard the transparent and verifiable financial framework guiding the implementation of the Settet Power Generation Company’s small hydro projects,” read part of the statement.
Settet Power Generation Company Limited, incorporated in October 2010, is jointly owned by seven tea factory companies in Kericho and Bomet — Kapkatet, Litein, Tegat, Momul, Kapkoros, Mogogosiek, Kapset — and KTDA Power Company Limited.
Each shareholder holds a 12.5% stake in the company, which was established to develop small hydroelectric plants aimed at reducing energy costs and boosting farmers’ earnings.
Expenditure Breakdown
According to KTDA, the two ongoing projects — Chemsot Small Hydro Plant (2.5 MW) and Kipsonoi Small Hydro Plant (2.6 MW), are being financed through a 65:35 debt-to-equity ratio.
This financing structure required a total equity contribution of KSh 1.1 billion from the shareholders.
As of October 2025, KTDA confirmed that Ksh 1.03 billion had been contributed and fully utilized.
Breakdown of the expenditure:
- Ksh580.8 million paid to civil works contractors
- Ksh204.8 million allocated for project design
- Ksh350.8 million spent on electromechanical equipment
- Ksh71.4 million used for land compensation at Chemsot and Kipsonoi
KTDA further disclosed that the total project expenditure stands at Ksh 1.208 billion, with a temporary deficit of Ksh 171 million covered through internal borrowings.
The agency stated that all funds have remained within their intended use, and none were diverted.
“The funds have remained within their intended use.”
Challenges cited by KTDA
KTDA cited several challenges affecting the progress of the Settet Power Generation Company’s hydroelectric projects.
The agency noted that finalizing financing agreements with international lenders has taken longer than expected, impacting the timely execution of the projects.
They added that the process of acquiring land for the Chemsot and Kipsonoi hydro plants has faced delays, particularly in negotiations and compensation procedures.
There have been overlaps and conflicts in transmission line routes with Kenya Power infrastructure, which have required resolution before construction could proceed.
These challenges have contributed to slower-than-anticipated progress, but KTDA emphasized that all funds remain within their intended use and the projects are ongoing.
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The agency reiterated its commitment to transparency and accountability in all its operations and urged leaders and stakeholders to verify facts before making public statements.
“We remain committed to delivering value to our farmers and ensuring that every shilling is used prudently.”
The clarification comes amid growing scrutiny from local leaders and farmer representatives who had raised concerns over the whereabouts of the substantial contributions made by tea growers in the West of the Rift Valley.
KTDA’s detailed financial disclosure aims to restore confidence and reaffirm its dedication to infrastructure development that directly benefits its stakeholders.
Impact of KTDA Debts on Tea Farmers
Tea farmers have experienced significantly lower bonuses for the 2024–2025 financial year.
In some regions, such as Bomet County, factories like Mogogosiek, Kapkoros, and Kapset paid as little as Ksh 12–13 per kilo, among the lowest in the country.
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KTDA attributed this to high operational costs and global market pressures.
The financial strain has led some farmers to uproot their tea bushes, citing unsustainable returns.
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